GAAR panel’s scope expanded to include NRI taxpayers

The finance ministry has expanded the scope of the terms of reference of the expert committee looking into the provisions of the General Anti Avoidance Rules (GAAR) to include all non-resident taxpayers, instead of only foreign financial institutions (FIIs).

The expert committee headed by Dr Parthasarathi Shome, constituted on 13 July 2012, has submitted its draft report, which has now been placed in public domain for seeking suggestions/opinions of the various stakeholders.

The GAAR panel, set up on the recommendations of the standing committee on finance, presented its report on the `Current Economic Situation and Policy Options' to Parliament on 30 August 2012.

The committee has inter alia found that the investment climate in the country has suffered serious setback and investor confidence has been hit mainly because of the concerns over the impact of retrospective tax laws and new General Anti Avoidance Rules (GAAR).

The committee, which has been asked to examine all issues related to the controversial GAAR, is now expected to submit a fresh report by 30 September.

The introduction of GAAR, proposed in the 2012-13 budget to check tax evasion, had triggered strong opposition from foreign investors, following which its implementation was postponed till April next year.