Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: cpt :: TDS :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: VAT Audit :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: form 3cd :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4%
 
 
Direct Tax »
 Hopeful of meeting direct tax collection target for this financial year: CBDT
 Bengaluru tops in income tax probes after demonetisation
 Income Tax department rejects black money disclosures of over Rs 2 lakh crore
 CBDT urges people to protect bank accounts from 'unscrupulous elements'
 No change in gold seizure norms in proposed I-T Law amendments
 Direct tax collection will get a long-term boost, Franklin Templeton says
 I-T Act amendments upset calculations of cash hoarders
 Claim tax benefit on costs incurred to evict tenants
 The Integrated Goods And Services Tax Act, 2016
 Here’s what Income Tax Department did leading up to demonetisation
 I-T department asks IDS declarants to pay tax by November 30

Shome Committee's recommendations, a welcome shift on GAAR
September, 04th 2012

The Shome Committee Report seeks to address a number of concerns on general anti-avoidance rules (GAAR) and, thereby, mitigate the negative publicity India had received on this count. GAAR, initially sought to be introduced vide the Direct Taxes Code, was introduced a year early - as a possible response to some of the observations of the Supreme Court in the Vodafone case - the implementation was then deferred by a year as a result of all the negative publicity it got. Then, the Shome Committee was set up to hear the stakeholders and the committee has now recommended pushing implementation back by three years.

GAAR was introduced alongside the retrospective amendment of S9 seeking to tax overseas transfer of assets with underlying value in India. Together, they raised the fear that India has an aggressive tax administration that results in a proliferation of litigation; litigation is time-consuming; and, at the end of it if one succeeds, the law could be amended retrospectively.

The Shome Committee Report should be viewed as a first, but very important, step in the bridging of the trust deficit. The report, prepared after an extensive round of consultations, addresses several key issues:

It recognises the need for a consultative process and a buy-in of the key stakeholders, something that was absent when the provisions were introduced. Similar provisions introduced elsewhere in the world were after extensive deliberations.

It addresses a key issue of a need for transition. The report recommends grandfathering of the income arising from investments made prior to the GAAR regime as being covered by the earlier regime. The three-year deferment should be viewed in this light. It provides a window of opportunity to taxpayers to prepare and brace themselves for the new regime and to the tax regime to get trained to implement it.

It recognises the need to respect tax treaties; we have a right to review and renegotiate tax treaties but bypassing them through domestic legislation is not an appropriate way forward.

It brings out the important distinction between tax planning arising through legitimate choices available under the provisions of law and tax avoidance by resorting to circuitous transactions that have no commercial value and are only tax-driven.

It appreciates that choices made in real life are driven by commercial people; revenue, sitting in hindsight, needs to understand the commercial aspects and cannot impute tax avoidance. The recommendation of a five-member approving panel, including industry/professional representation, is a welcome, path-breaking one. It will considerably address the issue of trust deficit.

It provides examples of when GAAR will apply and when not and the consequences thereof. This will provide a basis of understanding and interpretation of various subjective terms and mitigate the vagaries of the subjectivity. Given that business realities and forms of transaction keep on changing, the list of illustrations will need to be updated on an ongoing basis.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

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