Decision on General Anti-Avoidance Rules soon: revenue secretary
12 Jul 2014
The government is in the process of finalising its views on anti-avoidance tax laws and a final decision would be been taken on implementation of General Anti Avoidance Rules (GAAR) shortly.
Making this clarification, revenue secretary Shaktikanta Das said the General Anti-Avoidance Rules (GAAR) should be implemented from the scheduled date of April 2015.
The clarification comes in the wake of reply by the government in Lok Sabha on Friday that GAAR will be introduced from 1 April 2015, which spooked the markets into closing with losses.
The previous government had deferred introduction of GAAR for two years, that is, till 31 March 2015.
"It should not be interpreted that General Anti-Avoidance Rules (GAAR) is going to be brought in from April 2015. It is also a fact that the new government has not looked at the whole matter. So the new government would examine the whole matter and take a decision," Das said on the sidelines of an event organised by Ficci in Delhi on Saturday.
"This will happen shortly. There is sufficient time. We are still eight months away from the deadline," he said.
The proposed tax law is applicable to those claiming tax benefits of over Rs3 crore. The rules are aimed at minimising tax avoidance for investments made by entities based in tax havens.
As per the existing proposal, GAAR will cover investments made after March 2013, with effect from assessment year 2016-17.
The issue comes up after minister of state for finance Nirmala Sitharaman on Friday informed the Lok Sabha in a written reply that GAAR will be applicable from 1 April 2015.
"All that has been said is a factual position that as per the current law GAAR has been deferred by two years and the two-year period ends in March 2015." Das said.
On the proposed 20 per cent tax on debt mutual funds, the revenue secretary said the government has no plan to impose retrospective tax on debt funds. "CBDT will issue necessary clarification in this matter...There is no retrospectivity at all," he said'
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