Govt to set tax avoidance rules within 20 days: FM

In a previous draft report, the panel had recommended that the GAAR rules be deferred for three years

The Parthasarathi Shome panel today submitted to the finance ministry its draft report on retrospective taxation of indirect transfers of Indian assets and the final report on General Anti-Avoidance Rules (GAAR) which has proposed to defer the rules by three years.

The ministry will finalise GAAR guidelines in the next 20 days after studying the Shome panel’s final report, Finance Minister P Chidambaram told reporters today. He added, if required, the Income Tax Act could be amended at a later stage.

The report on retrospective amendments will be released for public comments once the finance ministry has gone through it.  It will decide the fate of Vodafone’s Rs 12,000 crore tax case with the Indian government. The finance minister had said a decision on sending tax notice to the company would be taken after getting Shome panel’s report on retrospective amendments.

Chidambaram had said tax officers won’t act rashly in Vodafone case. Vodafone India non-executive Chairman Analjit Singh, after meeting finance ministry officials recently, had also said the company was willing to discuss the matter with the government.