Securitisation trusts get stay on demand

While the Budget 2013 might have created a different sort of problem altogether, it seems the recovery of demand from mutual funds or securitization SPVs, holding them as non-tax-transparent, is to wait for some time. See the ruling of the Bombay High court here:
http://timesofindia.indiatimes.com/city/mumbai/No-public-authority-can-ignore-principle-of-legal-precedent-Bombay-high-court/articleshow/18991394.cms

Let no one make a mistake  - this ruling does not decide anything at all on the substance of the case. It is only a ruling on the recovery of demand pending an appeal. Hence, the issue of whether existing securitisation transactions are tax transparent still remains.

In the meantime, the Indian securitisation industry is expected to be reacting soon on the Budget 2013 proposals.

Budget 2013 proposals on securitisation

The Budget 2013 changes completely the tax structure of securitisation transactions in India. They wanted to be good, but ended up confused. See my detailed analysis at:
www.vinodkothari.com/secart.htm

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best
Vinod Kothari
vinod@vinodkothari.com