India announced a committee on Wednesday headed by a former high court chief justice to suggest ways to resolve a dispute with foreign investors over previously untaxed gains that has rattled businesses.

The tax department has been demanding that foreign firms pay a minimum alternative tax on profits. They did not pay it earlier because it was widely believed that it only applied to domestic investors until a court ruled otherwise in 2012.

The government has said while the tax will not apply from April 1, 2015 onwards, past incomes will face the levy, a stand challenged by foreign investors.

On Wednesday the finance ministry announced that a panel headed by retired chief justice A.P. Shah would review the imposition of the minimum tax on transactions before April 1, 2015.

"The Committee will also examine all the related legal provisions, judicial/quasi judicial pronouncements and such other relevant aspects as it may consider appropriate," the finance ministry said in a statement.

Other members of the panel are Ashok Lahiri, a former chief economic adviser to the federal government, and Girish Ahuja, a chartered accountant.

The tax department has imposed retrospective MAT tax claims totalling 6.02 billion rupees ($93.8 million) on companies. Some firms have challenged the levy as well as the 2012 court ruling.