New Delhi, May 21 (IANS): The government on Wednesday constituted the three-member A.P.Shah Committee that will look into controversial minimum alternate tax (MAT) demand on foreign companies, it was announced here.

The panel also comprises former chief economic advisor Ashok Lahiri and renowned chartered accountant Girish Ahuja. Its term is one year.

The finance ministry in a statement here also said other tax issues would be referred to the three-member committee in due course.

The Income Tax department had sent notices to 68 foreign institutional investors (FIIs) demanding Rs 602.83 crore as MAT dues of previous years, with FIIs, in turn, moving the higher court challenging the demand.

The Shah committee will examine MAT notices for the period before April 1, 2015, and it has been requested to "give its recommendations expeditiously".

Finance Minister Arun Jaitley in the Budget 2015-16 had exempted FIIs from paying MAT with effect from April. He has announced setting up of the Shah Committee earlier this month.

"The committee may interact with various stakeholders as it may deem fit. The committee may also invite officers from department of revenue including CBDT for consultations/discussions as may be necessary," it added.

The Central Board of Direct Taxes (CBDT) earlier this month said it will not issue any new demands for payments, and will take no coercive action to pursue claims that have already been filed under the controversial MAT.

Even after Jaitley's announcement exempting FIIs from paying MAT on the capital gains earned by them, the income tax department sent notice to at least 90 foreign portfolio investors (FPIs).

With the uncertainty created by MAT, foreign investors sold around $630 million in Indian shares and bonds on May 6, marking the biggest single-day sales since January 2014.