- Some companies have sought clarity on the applicability of the buyback tax on their offerings, which had been announced before the Budget proposal
- In the past three years, publicly traded firms bought back shares worth ₹1.43 trillion
Blindsided by the government’s budget proposal to tax share buybacks by listed companies at 20%, a couple of listed companies that had announced their buyback plans before the budget have written to the finance ministry seeking clarity on the application of the tax on their buyback offerings.
Exchange filings show that in the last one week at least two companies have approached the ministry of finance and markets regulator Securities and Exchange Board of India (Sebi) seeking clarity on the applicability of the buyback tax on their offerings, which had been announced before the Budget proposal on 5 July.
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Companies that have sought clarity on the tax include Greaves Cotton Ltd and SKP Securities Ltd, which together are looking to buy back shares worth ₹235 crore.
“The company has made a representation before the Ministry of Finance seeking clarifications amongst others, on the applicability of the proposed tax on the Company, as the company has prior to the introduction of The Finance (No .2) Bill 2019 made the Public Announcement and submitted the Draft Letter of Offer to Sebi without envisaging or providing for the effect of Buy-Back Tax,” said SKP Securities in an exchange filing on Monday.
Source: Livemint
