"To provide more time to both taxpayers and the tax administration to address all related issues, I propose to defer the applicability of the GAAR provisions by one year. The GAAR provisions will now apply to income of Financial Year 2013-14 and subsequent years," Mukherjee said in the Lok Sabha.
Besides, he said, "to provide greater clarity and certainty in the matters relating to GAAR, a Committee has been constituted under the Chairmanship of the Director General of Income Tax (International Taxation) to give recommendations for formulating the rules and guidelines for implementation of the GAAR provisions and to suggest safeguards so that these provisions are not applied indiscriminately."
The Committee has already held several rounds of discussion with various stakeholders including the Foreign Institutional Investors. The Committee will submit its recommendations by May 31, 2012, he said while moving the Finance Bill, 2012 for consideration and passage of the Parliament.
Suggesting amendments the GAAR, the Finance Minister said remove the onus of proof entirely from the taxpayer to the Revenue Department before any action can be initiated under GAAR.
"After examining the recommendations of the Standing Committee on GAAR provisions in the DTC Bill 2010, I propose to amend the GAAR," he said.
Addressing another concerns of foreign investors, the Finance Minister introduce an independent member in the GAAR approving panel to ensure objectivity and transparency. MORE
