Seeking to set at rest the concerns expressed by worried investors at home and abroad, the government on Monday announced the postponement of the implementation of the controversial GAAR (General Anti Avoidance Rules) by two years to April 1, 2016.
The postponement and other modifications in GAAR provisions marks the acceptance of the recommendations of the Parthasarathi Shome Committee, which was set up by Prime Minister Manmohan Singh following concerns expressed by investors on the Budget provision in this regard and the subsequent withdrawal of portfolio investment by foreign investors.
That the market is elated by the much-awaited relief is clear from the fact that investors gave a thumbs-up to the Centre’s decision and the Bombay Stock Exchange’s Sensex soared by 243 points to a two-year high of 19,906.41.
Clearing the air on the applicability of the GAAR provisions at a press conference here, Finance Minister P. Chidambaram said: “The modifications that we have done are fair, non-discriminatory, just, and strike a balance between interest of revenue and interest of investors. So, all apprehensions should now be set at rest.”
“Having considered all the circumstances and relevant factors, the government has decided that provisions of Chapter 10A of the I-T Act [dealing with GAAR] will come into force from April 1, 2016 as against April 1, 2014,” he said.