ICRIER's Parthasarathi Shome to head GAAR review panel

Prime minister Manmohan Singh has set up an expert committee on the controversial general anti-avoidance rules (GAAR), introduced in the budget by former finance minister Pranab Mukherjee, and which has been criticised by foreign investors.

The committee, headed by Dr Parthasarathi Shome, director and chief executive of the Indian Council for Research on International Economic Relations (ICRIER), will manage the consultation process with stakeholders and finalise the draft GAAR guidelines. Other members include N. Rangachary, former chairman of the Insurance Regulatory and Development Authority; Ajay Shah, professor at the National Institute of Public Finance and Policy; and Sunil Gupta, joint secretary, tax policy and legislation, in the department of revenue in the finance ministry.

The expert panel has been asked to finalise the guidelines and prepare a road map for implementation and submit the recommendations to the government by 30 September.

According to the Prime Minister's Office (PMO), while postponing GAAR by a year to 2013 was a very welcome move, a widespread consultative process is necessary to generate a discussion on GAAR provisions so that there is an informed debate on how it is going to operate.

It noted that the department of revenue undertook some consultations with stakeholders before finalising a first draft set of guidelines. This consultation was done by invitation. Subsequently, at the prime minister's behest, the draft guidelines were put on the web to lift the veil on the GAAR guidlines, noted the PMO.

''While these steps are good in themselves, a need was felt for far more widespread consultations,'' said the statement from the PMO. ''There is a need to have greater clarity on many other fronts. With this in view, the Prime Minister has constituted this Expert Committee which will bring transparency and a high degree of technical expertise to the consultation process.''