Govt will take a final view after detailed study of GAAR

The government will take a final view on the General Anti-Avoidance Rules (GAAR) after going through it in detail.

GAAR, a set of general rules aiming to check the tax avoidance, created concerns among investors after its introduction on 2012. Investors feared the law gave unbridled powers to tax authorities to check evasion of taxes.

“I have yet not gone through the whole issue in detail. The government will take a final view on the proposal already pending,” Jaitley said while replying to the debate on Finance Bill in the Lok Sabha on Friday.

The UPA government had proposed imposing (GAAR) from 2012 for those claiming tax benefit of over Rs 3 crore. But after an uproar by the investors, the UPA government had postponed implementation of GAAR by two years to April 1, 2015. The rules were aimed at minimising tax avoidance for investments made by entities based in tax havens.

Responding to comments of Congress leader Veerappa Moily on the Budget 2014-15 proposals, Jatiley said he was surprised when he heard Moily’s concern over GAAR which sent wrong signal among tax payers.

"I was surprised when I found that Moily Saheb himself was a little critical of GAAR… Moily Saheb is right when he says extra aggression sends a wrong signal in the matter of tax collection,” Jaitley said.