PHD Chamber asks Govt to delay implementation of GAAR by 1 yr

PHD Chamber of Commerce and Industry on Tuesday asked the government to implement the General Anti Avoidance Rules (GAAR) from April 1, 2016 instead of April this year.
The government had earlier proposed imposing GAAR from April 1, 2015, for those claiming tax benefit of over Rs 3 crore.
The rules are aimed at minimising tax avoidance for investments made by entities based in tax havens. As per the existing proposal, investments made after March 2013 will be covered under GAAR with effect from assessment year 2016-17.
At his meeting with Finance Minister Arun Jaitley here, PHD Chamber President Alok Shriram suggested, "For stable tax policy to take effect so as to reduce litigation and encourage promotion of India as a business destination or to promote Make in India, GAAR policy needs to be objective".

He further said: "The risk of litigation needs to be reduced. Clarificatory examples & circulars and training of officers will help in better understanding and implementation of the provisions (GAAR)".
On application of the rules, Shriram said the provisions of GAAR should be used in limited number of befitting cases as excessive use would be counterproductive.
"This would help in ensuring proper objective application of the provisions and prevent grievances. It is a settled law that tax officers should not make additions/disallowances based on suspicion, conjectures and surmises. This needs to be ensured in the course of application of GAAR," he said.