GAAR on anvil: Hope for the best and plan for the worst
May, 11th 2012
The deferral of the General Anti Avoidance Rules (GAAR) to April 1, 2013, brought a sense of relief for investors exhausted by the recent slew of harsh and retrospective tax provisions. Taxpayers today are confronting the complex and rapidly changing tax and regulatory environment for doing business in India the sunset of tax holidays, the proposed migration to the Direct Tax Code and a sweep of judicial decisions that often provide conflicting interpretations.
This brings into question on how best it is for taxpayers and investors to plan living with GAAR. Well, couple of aspects deserves attention. Firstly, GAAR is the big daddy for tackling tax abuse which has been introduced in several jurisdictions around the world. Although deferred by a year, it is now here to stay. GAAR supplements the focused and directed attempts of the tax authorities to tackle specific tax abuses via specific provisions, often collectively referred..