New Delhi: The government expanded the scope of the expert committee on General Anti-Avoidance Rules (GAAR) to include all non-resident tax payers, even as the Committee submitted its draft report to the Ministry. The committee suggested that GAAR be postponed for the next three years. For more on that click here.
The announcement to increase the scope of GAAR committee, which is headed by tax expert Parthasarthi Shome, was made after the panel in its report suggested changes in the Income Tax Act and Rules.
The committee, which was set up by Prime Minister Manmohan Singh in July to address concerns of foreign and domestic investors on GAAR, suggested the government should issue a circular to clarify GAAR provisions along with illustrations.
Representational Image. AFP
“The draft report has recommended certain amendments in the Income-tax Act, 1961; guidelines to be prescribed under the Income-tax Rules, 1962; circular to clarify GAAR provisions along with illustrations; and other measures to improve tax administration specifically oriented towards GAAR matters”, a Finance Ministry release said.
“It has now been decided to expand the scope of the terms of reference of the committee to include all non-resident tax payers instead of only FIIs,” it said.
The Finance Ministry had earlier on 6 August, 2012 asked the expert committee to examine the applicability of the amendment on taxation of non-resident transfer of assets where the underlying asset is in India, in the context of Foreign Institutional Investors (FIIs) operating in India purely for portfolio investment.
The stakeholders, the release added, can submit their comments on the draft report by 15 September.
In view of the concerns expressed by investors, the Government had already postponed implementation of GAAR by a year to April, 2013. The proposal was introduced in Budget for 2012-13 by the then Finance Minister Pranab Mukherjee.
PTI
