Finance Ministry’s panel, which is looking into the controversial general anti-avoidance rules (GAAR) to check tax evasion, will finalise its report by August after taking on board concerns of FIIs and other stake holders.
“We will have few more meetings and will finalise the GAAR report in the next two months,” a senior finance ministry official said after a meeting of the advisory committee on GAAR with FIIs, private equity players, industry chambers and other experts.
In view of concerns expressed by foreign and domestic investors, the Government deferred implementation of the GAAR till April 2013.
The official said the FIIs are demanding that all “grey areas regarding commercial intent” be removed. They also want the government to address concerns regarding powers of the panel on advance ruling.
To provide greater clarity and certainty in the matters relating to GAAR, the government had set up a committee under the Chairmanship of the Director General of Income Tax (International Taxation).
The Committee was also required to give recommendations for formulating rules and guidelines for implementation of the provisions and suggest safeguards to prevent misuse of norms.
Government has already announced that unlike the original proposal, the onus to prove violation of GAAR would now be on the Revenue Department and not on the taxpayer.
Finance Minister Pranab Mukherjee had made the changes after examining recommendations of the Standing Committee on GAAR provisions in the DTC Bill 2010.
Addressing other concerns of foreign investors, the Finance Minister had introduce an independent member in the GAAR approving panel to ensure objectivity and transparency.
(curtsey : money control)
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