GAAR panel expanded to cover non-resident tax payers

September 1st, 2012 - 7:56 pm ICT by IANS  

New Delhi, Sep 1 (IANS) The government Saturday expanded the scope of the expert committee on General Anti-Avoidance Rules (GAAR) to include all non-resident tax payers, even as the committee submitted its draft report to the finance ministry.

The announcement to increase the scope of GAAR committee headed by tax expert Parthasarthi Shome, was made after the panel in its report suggested changes in the Income Tax Act and Rules.

A finance ministry release said: “The draft report has recommended certain amendments in the Income-tax Act, 1961; guidelines to be prescribed under the Income-tax Rules, 1962; circular to clarify GAAR provisions along with illustrations; and other measures to improve tax administration specifically oriented towards GAAR matters”.

“It has now been decided to expand the scope of the terms of reference of the committee to include all non-resident tax payers instead of only FIIs,” it said.

The government had last month asked the expert committee to examine the applicability of the amendment on taxation of non-resident transfer of assets where the underlying asset is in India, in the context of Foreign Institutional Investors (FIIs) operating in the country purely for portfolio investment.

The draft report now has been placed in public domain inviting suggestions and opinion of the various stakeholders.

The stakeholders, the release said, can submit their comments by Sep 15.

In view of concerns expressed by investors, the government has already postponed implementation of GAAR by a year to April 2013.

The committee on GAAR was constituted in July to address concerns of foreign and domestic investors on retrospective tax laws.

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