Delay in implementation not to hit black money measures, says Chidambaram
Finance Minister P Chidambaram has clearly indicated the government favours a go-slow approach on the implementation of the controversial General Anti-Avoidance Rules (GAAR).
Replying to a question in the Lok Sabha, Chidambaram said, “The delay in the implementation of GAAR would not have a significant impact on the efficacy of measures being taken against proliferation of black money and checking tax evasion.” He added GAAR provisions were directed towards preventing tax avoidance by way of aggressive tax planning.
“The generation of black money and tax evasion are primarily dealt with by various anti-evasionary measures like surveys, search and seizure operations and collation of information tracked and received from various sources,” he said.
The Finance Act, 2012, had introduced GAAR in the Income Tax Act, scheduled to be implemented from April 2014. The implementation was postponed by a year to provide scope for wider consultation before bringing it into force. The first draft GAAR guidelines, prepared by the finance ministry, were placed in the public domain on June 29 to facilitate comments from various stakeholders.
On July 17, Prime Minister Manmohan Singh constituted an expert committee under Parthasarathi Shome to receive feedback on the guidelines, prepare a second draft and submit revised guidelines and a roadmap for the implementation of GAAR—by September 30.
In a written statement in the Lok Sabha, Chidambaram stated 14 representations had already been received from individuals and institutions on the draft guidelines, including those from the US Council for International Business, PricewaterhouseCoopers, Bombay Chambers of Commerce and Industry and ALSTOM. The industry chambers favour delaying the implementation of GAAR, till apprehensions on the guidelines are removed.
The ensuing Maharastra Budget may witness several tax relief for the dealers, traders and growers of agricultural and allied services.
The decision came after the government opened the sector for higher FDI and relaxed compulsory licensing for a number of equipment