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Finance ministry likely to adopt go-slow approach on GAAR

Delay in implementation not to hit black money measures, says Chidambaram

BS Reporter  |  New Delhi 

Finance Minister 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 would not have a significant impact on the efficacy of measures being taken against proliferation of black money and checking tax evasion.” He added 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 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 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 constituted an expert committee under 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.

First Published: Thu, August 09 2012. 00:20 IST