In a bid to bring ‘greater clarity’ on GAAR (General Anti-Avoidance Rules) and prepare its implementation roadmap by September 30, Prime Minister Manmohan Singh, on Friday, constituted an expert committee to prepare and finalise guidelines for the hitherto controversial tax provision.
“The Prime Minister has approved the constitution of an Expert Committee on GAAR to undertake stakeholder consultations and finalise the guidelines for GAAR (General Anti-Avoidance Rules)… This committee would manage the consultation process and finalise the draft GAAR Guidelines,” a PMO statement said.
Coming as it does within a fortnight of the Finance Ministry placing a set of draft guidelines on GAAR in public domain for debate and feedback, the four-member committee headed by ICRIER chief and taxation expert Parthasarathi Shome has been asked to vet the norms on the basis of feedback from stakeholders.
Other members of the committee are: N. Rangachary, former Chairman of Insurance Regulatory and Development Authority (IRDA), Ajay Shah, Professor at economic think-tank NIPFP, and Sunil Gupta, Joint Secretary, Department of Revenue in the Finance Ministry.
As per the PMO’s plans, the Shome committee will receive comments from stakeholders and general public till the end of this month, instead of the July 20 deadline that was set in the Ministry’s draft. Based on the feedback, the expert panel will rework the guidelines and publish the second draft by August 31 and thereafter finalise the GAAR guidelines and a roadmap and submit these to the government by September 30, 2012.
Explaining the reason for changes in the finalisation process even as the draft has brought about clarity on some fronts, the PMO statement said: “There is a need to have greater clarity on many other fronts…this Expert Committee which will bring transparency and a high degree of technical expertise to the consultation process”.
