The GCCI has called on the Centre to restore the 5% withholding tax rate for Foreign Portfolio Investors in government securities and rupee bonds, claiming that the current rate hampers India’s market appeal.
GCCI Advocates for 5% Withholding Tax Restoration for FPIs
The Goods and Services Tax Council of India (GCCI) has urged the central government to reinstate the 5% withholding tax for Foreign Portfolio Investors (FPIs) investing in government securities and rupee-denominated bonds. This recommendation comes amid concerns that the existing 20% withholding tax rate is detrimental to India's attractiveness in global debt markets.
By advocating for a reduction in withholding taxes, the GCCI aims to bolster foreign investments, particularly in government securities. The organization contends that competitive tax rates are essential for maintaining India’s edge as an investment destination.
For practitioners in the field of tax and foreign investment, this advocacy could signal potential changes in tax policy that may influence investment strategies. Staying informed about governmental responses and policy alterations will be vital for advising clients effectively in a fluctuating economic climate.
Citations
- GCCI Advocacy (2026) 1446386
