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FinMin for implementation of GAAR from 2014-15

By Religare

FinMin for implementation of GAAR from 2014-15
The finance minister P Chidambaram is learnt to have proposed introduction of controversial law against tax avoidance General Anti Avoidance Rules ( GAAR ) from 2014-15, as against the recommendation of Shome Panel which had suggested that the proposal be deferred by three years, till April 2016.

Media reports said that finance ministry was not in favour of deferring the GAAR beyond April 2014 and has left the decision up to Prime Minister now.

However, it has also been believed that barring the time frame recommendation, finance minister has accepted most other suggestions of the Shome Panel.

The Shomepanel, the expert committee on General Anti Avoidance Rules (GAAR) headed by Parthasarathi Shome, has already submitted its final report to the government last month and had provided a short-term relief to the investors by suggesting postponement of the controversial tax provision by three years till 2016-17 along with abolition of capital gains tax on transfer of securities.

The expert panel on GAAR had also recommended provisions should not be invoked to examine the genuineness of the foreign investor entities' residency in the island nation.

Aimed at penalizing the tax evaders, by either discouraging Indian companies and investors from "round-tripping", or by stopping investors from routing investments through Mauritius and other tax havens, GAAR would be crucial to government's fiscal deficit and GDP growth plans.

Read more about: gaar chidambaram
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