Budget Box: Changed GAAR provisions to come into effect from April 2016
As announced in the current Budget, the modified version of controversial General Anti Avoidance Rules (GAAR) provisions will be implemented from April 2016. The modified provisions maintain the basic thrust and purpose of GAAR.
The government had formed an expert committee chaired by Parathasarthi Shome to give recommendations on the anti-avoidance tax proposals. The panel had recommended to defer GAAR by 3 years and abolition of short-term capital gains tax.
Impermissible tax avoidance arrangements will be subjected to tax after a decision is made through a well laid out procedure involving an assessing officer and an Approving Panel headed by a Judge.
The Finance Bill 2013—14 proposes to set up a Tax Administration Reform Commission to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system.
A Standing Council of Experts will be set up in the Finance Ministry to examine the international competitiveness of the Indian financial sector. It will periodically examine the transaction costs of doing business in the Indian market, and provide suggestions to Government for necessary measures.