CB
Scope of the Terms of Reference of the Expert
Committee Headed by Dr. Parthasarathi Shome on Gaar Expanded to Include all
Non-Resident Tax Payers Instead of Only FIIs:
The Standing Committee on Finance has
presented its report on Current Economic Situation and Policy Options to
Parliament on August 30, 2012. The Committee has inter alia found that the
investment climate in the country has suffered serious setback and investors
confidence has been hit mainly because of the concerns over the impact of
retrospective tax laws and new General Anti Avoidance Rules(GAAR).
The Government had constituted an Expert
Committee headed by Dr. Parthasarathi Shome on GAAR on July 13, 2012. The
Committee has now submitted its draft report, which has been placed in public
domain on September 1, 2012 for seeking suggestions/opinion of the various
stakeholders.
The Government had earlier on August 6, 2012
also requested the Expert Committee to examine the applicability of the
amendment on taxation of non-resident transfer of assets where the underlying
asset is in India, in the context of Foreign Institutional Investors (FIIs)
operating in India purely for portfolio investment. It has now been decided to
expand the scope of the Terms of Reference of the Committee to include all
non-resident tax payers instead of only FIIs.
The
terms of reference of the Committee are:
1. Receive
comments from stakeholders and the general public on the draft GAAR guidelines
which have been published by the Government on its website.
2. Vet and
rework the guidelines based on this feedback and publish the second draft of
the GAAR guidelines for comments and consultations.
3. Undertake
widespread consultations on the second draft GAAR guidelines.
4. Finalise
the GAAR guidelines and a roadmap for implementation and submit these to the
government.
The
Committee is mandated to work to the following time schedule:
1. Receive
comments from stakeholders and general public till end-July 2012.
2. Vet and
rework the guidelines based on this feedback and publish the second draft GAAR
guidelines by 31 August 2012.
3. Finalise
the GAAR guidelines and a roadmap for implementation and submit these to the
government by 30 September 2012.
The Committee, chaired by Dr. Parthasarathi
Shome, has submitted its draft report after analysis of the GAAR provisions and
noting the concerns expressed by various shareholders. The draft report has
recommended certain amendments in the Income-tax Act, 1961; guidelines to be
prescribed under the Income-tax Rules, 1962; circular to clarify GAAR
provisions along with illustrations; and other measures to improve tax
administration specifically oriented towards GAAR matters.
GAAR
