Don't dress 'indecently': Gujarat cops to women

Don't dress 'indecently': Gujarat cops to women

Police posters advise women not to dress 'indecently' and to use cellphones with care.
Cong loyalist who praised Modi

Cong loyalist who praised Modi

Uttarakhand Guv Aziz Qureshi: A Cong loyalist who praised Modi and sued NDA

Two-year GAAR respite will help tackle irritants

Jan 18 2013, 00:42 IST
Comments 0
SummaryThe suspense over the fate of the General Anti Avoidance Rules has partially lifted with the finance minister’s recent statement on the government’s decision over its final contours.

The suspense over the fate of the General Anti Avoidance Rules (GAAR) has partially lifted with the finance minister’s recent statement on the government’s decision over its final contours. Over the last few months, the looming GAAR, slated to come into effect from April 2013 with sweeping discretionary powers to tax officers and the lack of an effective safeguard mechanism against its indiscriminate invocation had given taxpayers and the investing community some anxious moments.

An expert committee headed by Parthasarathi Shome to review GAAR had submitted its final report in September 2012. The report, which had been under the consideration of the government for some time, has been made public along with the FM’s statement. While the interim recommendations of the expert committee, made available for public comments, had raised hopes for a more balanced GAAR regime with the addressing of a substantial number of genuine concerns, the anxiousness had only partly abated as there was no visibility of its acceptability by the government. The report that the Central Board of Direct Taxes was against some of the recommendations, especially those related to deferment of GAAR, also didn’t help much.

The decision to accept major recommendations, albeit with some modifications, should finally bring some relief. While the fine print will be known once Budget 2013 is unveiled, some of the broader decisions are certainly welcome and have cheered sentiments. Let us look at some of the important aspects and implications.

GAAR being deferred by two years should provide the much-needed time to prepare the tax payer and the tax collector for the drastic change in tax regime. It will also provide respite to the otherwise legitimate transactions and arrangements which were already in process when the GAAR regime was announced in 2012 but could not have been completed before GAAR was slated to be effective.

Arrangements, where tax advantage is only one of the purposes or merely incidental would be spared. Thus, transactions structured with an eye on a tax benefit will now not attract GAAR if the main commercial purpose of the transaction can be demonstrated. This would also imply that choosing one option out of the many available under law would not be frowned upon merely because the option chosen was more tax efficient.

The proposed reconstitution of the approving panel to supervise GAAR-related cases is likely to restore confidence in the independence of the panel. The inclusion

Single Page Format
Ads by Google

More from Economy

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...