P-Notes: Service Tax notice to FIIs

Recent Stories Banks to meet RBI norms on MFs by Dec 13 EU sees lower euro zone 2008 growth L&T bags Rs 723cr Petrobras order TCS in aeronautical design JV with Saab More Recent Videos Kingfisher now looks east Germany to relax visa norms Gaming - the next frontier... Pantnagar emerges as auto hub... More The P-Notes controversy shows no signs of going away anytime soon. UTVi first reported last month about the income tax department firing notices to FIIs, seeking information about their P-Notes transactions. Well, now, the Service Tax department is joining the party. It has issued notices to custodian banks for FIIs, seeking information on all P-Note transactions entered into by them. Here is how the entire P-Note mechanism works. Many overseas investors invest in the Indian stock markets without disclosing their identities. They park their money with Foreign Institutional Investors (FIIs) who are registered with the Securities and Exchange Board of India (Sebi) and invest on behalf of these overseas investors. FIIs issue a financial instrument called a participatory note (P-Note) to such investors.

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