Mauritius investments safe as GAAR will wait till 2016
fe Bureau: New Delhi, Jan 15 2013, 23:49 IST
on Monday rephrased its recommendation demanding the abolition of “the tax on gains arising from transfer of securities, being equity shares or units of equity oriented mutual funds, which is subject to STT, whether in the nature of capital gains or business income, to both residents as well as non-residents.” The idea is to give the same benefit to all investors irrespective of their tax residency and the nature of income from investments. Although Chidambaram remained silent on this recommendation, experts remained hopeful that it may eventually make its way to the statute book. “Since the minister has not said anything to the contrary, we could expect a decision on this when the Union Budget for 2013-14 gets presented,” said KR Sekar, partner, Deloitte Haskins & Sells.
Importantly, Chidambaram also laid down the broad procedure for GAAR operations by proposing to set up an neutral approving panel – headed by a serving or retired high court judge and an independent expert and not restricted in strength to three as in the Finance Act – and said its views would be binding on the assessee as well the tax authorities. Pertinently, he said: “The approving panel may have regard to the period or time which the arrangements had existed...” (Mind that in the Vodafone case, the corporate structure that allowed London-headquartered telecom firm and Hong Kong-based Hutchison to clinch the deal that created Vodafone Essar in India had existed much before the 2007 transaction and the Supreme Court had stressed this
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