Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: cpt :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: form 3cd :: TDS :: empanelment :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: Central Excise rule to resale the machines to a new company
« General »
 Tax collection assumptions in India's budget ambitious
 All scrutiny cases, sans search, to be e-assessed
 Key tax changes that will come into effect from April 1
 Eight lakh companies on Income Tax department radar for not filing tax returns
 4 things a taxpayer shouldn’t miss
 Impact on LTCG will be more than 10 per cent
 Here's how much the tax reliefs you want will cost the finance minister
 Companies (Appointment and Qualification of Directors) Amendment Rules, 2018
 How young earners can claim HRA tax exemption with ease
 IT firms eye change in foreign tax credit rule
 The most thrilling idea before every Budget: No income tax

GAAR may be thrown open to public debate
May, 08th 2012

Chairman of BMR Advisors Mukesh Butani believes that the government will throw general anti-avoidance rules (GAAR) open to public debate during the one year extension that was announced by Finance Minister Pranab Mukherjee today. This makes a whole lot of sense because a substantive change in the law of this nature should be debated with the industry, he said.

Initially, the consensus was that GAAR will be implemented along with the direct taxes code (DTC), but Bhutani tells CNBC-TV18 that it will now come into effect in April 2013 whether DTC comes into effect or not.
He further adds that the panel set up to approve GAAR will contain one independent member by way of a joint secretary from Ministry Of Law. This is with a view to build some level of independence in the GAAR panel, he explained.
Below is an edited transcript of his interview with Siddharth Zarabi. Also watch the accompanying video.
Q: What is the impact of the change as far as the general anti-avoidance rules are concerned? What is the material change that he has announced today?

A: As you know, in the Finance Bill he had proposed that the general anti-avoidance would be applicable from 1st April 2012 and enabling provisions by way of subordinate legislation and rules will prescribe check and balances. So in absence of those rules and as a result of concern and fear, part of it was the fear of the unknown and part of it was how India will administer the GAAR legislation, there was nervousness.

Now most people believed that he should have ordinarily legislated GAAR in conjunction with the direct tax code provision. So if he has deferred the direct taxes code, he should have deferred the GAAR provision as well, which is what he seems to be doing now.

Q: The Finance Bill explanatory memorandum said April 1, 2013 but said assessment year 2012-13, which effectively meant that all transactions that are being done in the current financial year would have been covered ultimately.


Also, with the direct taxes code the concept of the assessment year will go away. What you are telling us is that now GAAR will come with the advent of the DTC, is that impression correct?
A: Absolutely. When you say that GAAR will be applicable from April 1, 2012, I mean that it will apply in the current year, that was what was the Finance Bill provision. In the Finance Bill, the word used is applicable from April 1, 2013 because that is with reference to assessment year. The financial year April 1, 2012 to March 31, 2013 is assessment year 2013-14, which means that from an income tax assessment year stand point, it is with effect from April 1, 2013.

That proposal seems to have been deferred. This proposal will now clearly apply from April 1, 2013, whether DTC comes into effect or does not come into effect. That would mean two things; one, that the subordinate legislation that would come out would be thoroughly debated. I have a feeling that the rules will be thrown open for public debate which makes a whole lot of sense because a substantive change in the law of this nature should be debated with the industry.
The second aspect that he has added is that the onus of proof would now be on the tax department. This was a recommendation of the Standing Committee on Parliament that he has announced today.
Q: That report actually came after the Budget?

A: No that report came few days before the Budget, but I would imagine that the Finance Bill provisions would have been finalized by then. The third important change that is brought about is that the panel which is going to eventually give a stamp of approval whether GAAR should be invoked or not will have one independent member by way of a joint secretary from Ministry Of Law. So in other words, you would not have all the members from the tax administration.

This is with a view to build some level of independence in the GAAR panel. So I think these are the three changes as was explained by way of a statement that the Finance Minister made in Parliament today.

Q: The Finance Minister also said that any tax payer can approach the authority for advance ruling to determine whether his arrangement is permissible under the GAAR provisions. Clearly, this is also something that is extremely significant?

A: It is significant, no doubt about it. Though the Finance Minister did not make a direct statement to this effect, the statements that are being issued or made available from Parliament seem to suggest that a transaction where GAAR can be classified as impermissible transaction, now you can test that transaction with the advance ruling authority.
So you now have an added layer of checks and balances built in. If a tax payer wants to seek a ruling, he can do that now by virtue of the amendment that you just read out.

Q: There was also an expectation that he would sort of bow to pressure as far as the retrospective amendments, which now is popularly called the Vodafone amendment, but he hasnt seeded any ground, has he?

A: There are various kinds of retrospective amendments. The amendments to tax Vodafone kind of transaction is just one amendment. There is no statement to that effect, so we will need to see how the bill gets debated in Parliament for the rest of the week and then see whether he moves an amendment to be able to withdraw that proposal or modify that proposal. But you are right, there has been no change in so far as other forms of retrospective amendments are concerned.

Q: What is your sense? Will there be some give and take on Vodafone outside of the legislative framework at least?

A: I need to be a crystal ball gazer to be able to answer that question. I would merely say that my take away from the first debate on the Finance Bill is that here is a Finance Minister who is willing to listen and absorb and take into consideration views and sentiments that are echoed by the industry.
I do not know whether this will apply to all kinds retrospective amendments, I hope it does to some forms of retrospective amendments, but we need to wait and see how this week goes by way of Parliamentary debate on the Finance Bill.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions