Foreign investors are cheering the news, which sees the legislative change pushed back from its original implementation date of April 1 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, rather than “the main purpose or one of the main purposes” as previously worded.
“The modifications we have done are fair, non-discriminatory, just and strike a balance between interest of revenue and interest of investors,” said Chidambaram.
“The decisions [contained in today’s announcement regarding GAAR modifications] have by and large addressed the concerns that were expressed by investors,” he added. “Most of the apprehensions I think have been removed now.”
