“GAAR, I also deferred it by one year (to April 2013) for further discussions. It (the new panel) can be treated as a continuing affair," Mukherjee told reporters, when asked about the setting up of a new four-member committee last week.
Foreign investors have raised concerns against the introduction of GAAR which was unveiled in a discussion paper in March’s budget.
Before he resigned on June 26, Mukherjee promised to put in place safeguards such as a threshold to ensure that officials would not harass taxpayers, as well as an independent panel.
He had also announced the government's intent to keep participatory notes, which are derivative instruments used by overseas investors several of whom are ineligible to invest in India.
Since Mukherjee’s departure, a document was released that contained all the safeguards, but prime minister Manmohan Singh, who has taken on the responsibility of finance minister in the absence of a replacement, will approve the final document.
Subsequently, the prime minister’s office set up a new committee under Parthasarthi Shome, chief executive of the Indian Council for Research on International Economic Relations, to look at the issue and effectively took away the mandate Mukherjee had given to an earlier panel comprising government officers, foreign institutional investor representatives and other stakeholders.
Comments can be submitted until the end of July and a second draft of the guidelines will be published by August 31. The final guidelines will be submitted to the government by September 30.
The draft GAAR guidelines will also be discussed at International Tax Review's third annual India Tax Forum in Delhi on September 5 & 6.
Confirmed speakers include:
- RN Dash, ex-Director General of Income Tax (International Taxation), Government of India;
- Girish Srivastava, ex-Director General of Income Tax (International Taxation), Government of India;
- Mohan Parasaran, Senior Advocate, Supreme Court of India and Additional Solicitor General of India;
- Prashant Bhatnagar, head of India tax, Procter & Gamble;
- R Mani, head of India tax, Tata;
- Ketan Madia, vice president, taxes, GE; and
- Bela Seth Mao, head of India tax, Shell.
The foremost Indian tax specialists will tackle this issue and more. It is a unique opportunity to hear their views, increase your understanding of the upcoming changes and how best to prepare for the future.