GAAR panel for modification of norms
10 July 2012 1:29 AM GMT
Finance ministry’s committee on controversial tax proposal General Anti Avoidance Rules [GAAR] on Monday decided to modify the draft guidelines by reducing the number of illustrative examples.
The next meeting of the GAAR panel, which comprises officials of the finance ministry and representatives of FIIs and other stakeholders, will be held on August 12 and 13.
‘The GAAR committee met on Monday and discussed the examples [given in the draft guidelines]... some examples will be reduced, some will be combined’, said a senior finance ministry official after the meeting.
The draft guidelines has provided 21 examples to illustrate the applicability and non-applicability of the GAAR, which was proposed by former finance minister Pranab Mukherjee to check tax evasion by foreign investors.
The provisions, however, invoked sharp criticism from the foreign and domestic investors, following which the government decided to postpone its implementation by one year to April 2013. The ministry had also constituted a committee to look into the concerns of investors. The Committee last month came out with draft guidelines on GAAR to seek comments from various stakeholders.
Among other things, the draft norms provide for a threshold limit for invocation of GAAR. It also clarified that the norms would apply to income accruing only after 1 April 2013.
The draft guidelines, however, got caught in a controversy following a release by PMO which said the Prime Minister had yet to see them.
‘[The draft guidelines] have not been seen by the Prime Minister and will be finalised with the approval of the Prime Minister, who holds the Finance portfolio, only after considering the feedback received,’ the PMO had said in a release barely 12 hours after the draft norms were released by the Finance Ministry on 28 June.
The next meeting of the GAAR panel, which comprises officials of the finance ministry and representatives of FIIs and other stakeholders, will be held on August 12 and 13.
‘The GAAR committee met on Monday and discussed the examples [given in the draft guidelines]... some examples will be reduced, some will be combined’, said a senior finance ministry official after the meeting.
The draft guidelines has provided 21 examples to illustrate the applicability and non-applicability of the GAAR, which was proposed by former finance minister Pranab Mukherjee to check tax evasion by foreign investors.
The provisions, however, invoked sharp criticism from the foreign and domestic investors, following which the government decided to postpone its implementation by one year to April 2013. The ministry had also constituted a committee to look into the concerns of investors. The Committee last month came out with draft guidelines on GAAR to seek comments from various stakeholders.
Among other things, the draft norms provide for a threshold limit for invocation of GAAR. It also clarified that the norms would apply to income accruing only after 1 April 2013.
The draft guidelines, however, got caught in a controversy following a release by PMO which said the Prime Minister had yet to see them.
‘[The draft guidelines] have not been seen by the Prime Minister and will be finalised with the approval of the Prime Minister, who holds the Finance portfolio, only after considering the feedback received,’ the PMO had said in a release barely 12 hours after the draft norms were released by the Finance Ministry on 28 June.
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