Industry says draft GAAR guidelines encouraging

What experts say about the draft guidelines

Industry and experts on Saturday said the draft guidelines on General Anti-Avoidance Rules (GAAR) are encouraging and progressive.     

"The Report of Expert Committee on GAAR is most encouraging. CII has been advocating a postponement in the introduction of GAAR," CII Director General Chandrajit Banerjee said while commenting on the draft proposals. He said the report is especially laudable since ambiguity in the earlier guidelines in terms of use of words such as "commercial substance" have been addressed by providing a clear definition.

Ernst & Young Tax Partner Pranav Sayta said the suggestion to defer implementation the anti-tax avoidance provision by three years among other suggestions could go a long way in reviving investors sentiment.

The GAAR panel under tax expert Parthasarathi Shome, constituted by Prime Minister Manmohan Singh in July, has submitted a detailed draft guidelines to address the concerns on the issue.

Earlier, a Finance Ministry panel had also given recommendations.     

"Certain features such as recommendation to abolish capital gain on listed securities are very well thought off," PwC India's Rahul Garg commented. Another leading chamber Ficci hoped the draft would lead to bold policy decisions aimed at restoring confidence and reviving growth. "Ficci is happy that a pragmatic and practical view has been taken in recommending a deferral in the implementation of GAAR at a time when business sentiment desperately needs a boost," chamber's president RV Kanoria said. The panel has sought public comments on the draft guidelines till September 15 and after that the guidelines are expected to be finalised.