Finance Minister Confirms Indian GAAR Delay to 2016
First published in the International Tax Review, 16 January 2013
The Indian Finance Minister has confirmed that the major recommendations of the expert general anti-avoidance rule (GAAR) committee will be accepted and that GAAR implementation will be deferred by 2 years to April 2016.
This means GAAR will be applicable to assessments for the financial year commencing 1 April 2015.
This is positive news for foreign investors, who will welcome the legislative change being pushed back from its original implementation date of 1 April 2014.
Most of the other recommendations made by the Parthasarathi Shome-led expert committee were also accepted, including requirements regarding the make-up of the GAAR Approving Panel, the transaction value threshold for GAAR to be invoked, and a softening of the GAAR application criteria so that obtaining a tax benefit must be the main purpose for an arrangement.
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