India’s tax office seeks stakeholder feedback on GAAR norms
New Delhi, May 27 (IANS) India’s income tax department on Friday invited stakeholders’ comments on the controversial General Anti Avoidance Rule (GAAR) that has provoked concern among foreign investors and implementation of which was deferred earlier.
“Several stakeholders and industry associations have represented the guidelines for implementation of GAAR be issued so that there is adequate clarity in this regard,” said a finance ministry statement, adding that the last date for sending feedback is June 30.
Finance Minister Arun Jaitley, in his 2016-17 Budget, has announced that GAAR will be implemented from April 2017, after deferring its applicability, by two years, last year. GAAR had earlier become part of the law.
Proposed in the 2012-13 budget to prevent tax evasion, GAAR evoked sharp reactions from foreign as well as domestic investors who feared that it could be misused by taxmen to harass investors.
GAAR provisions will be effective from assessment year 2018-19 onwards or the financial year 2017-18.
“The general public and stakeholders are therefore requested to provide their inputs on the provisions of GAAR in respect of which further clarity is required, from its implementation perspective,” the statement said.
The Central Board of Direct Taxes has also asked stakeholders to refrain from giving references of “hypothetical situations”.
The government feels that GAAR should now be implemented as scheduled since foreign institutional investors and other such portfolios have been escaping capital gains in one form or the other, keeping domestic industry at a disadvantage.