India Foreign Tax Row
Indian Finance Minister Arun Jaitley in JanuaryReuters

India's Finance Minister Arun Jaitley has said foreign investors should not look to New Delhi, for now, to provide relief from a court ruling ordering them to pay taxes on years of previously untaxed capital gains.

Jaitley, speaking at a seminar in Washington on 16 April, said that his 2015 budget exempts foreign profits from the Minimum Alternate Taxation (MAT) as of April 2015.

But with regard to previous years, Jaitley suggested that foreign institutional investors, who had gone to a judicial tribunal and lost, appeal the court verdict rather than asking him to step in, Reuters reported.

Jaitley said: "Their expectation that having lost the case the state must now intervene. That looks a little difficult from my point of view, and therefore they have the option of agitating their remedies in law.

"It may not be possible for any government after a court verdict, which is a transient court verdict, which is still subject to appeals, to intervene in those particular matters."

European and American investor groups are unhappy with India's MAT, which will apply levies for past years at a higher rate than what they had been subject to in the past.

Tax experts say foreigners may owe $8bn (£5.3bn, €7.4bn).

Many foreign investors have received notices requesting their MAT calculations for financial year 2011-2012 and India's tax office has said it will also apply the tax to previous years.