The NDA government is yet to take a call on implementation of the General Anti-Avoidance Rules (GAAR) which were to be effective from assessment year 2014-15.
“On GAAR, let me clarify, it should not be interpreted that GAAR will be brought in from Apr 1, 2015.
All that I said is the factual position that as per the current law, GAAR has been deferred by two years. It is also a fact that the new government has not looked at the whole matter.
So they will look at the whole matter and take a decision,” Revenue Secretary Shaktikanta Das said here.
He said that the new government will examine the entire matter and take a decision. Das ensured that the review would be done shortly. Das was speaking at an industry event.
The UPA government had proposed imposing GAARfrom April 1, 2015 for those claiming tax benefit of over Rs 3 crore.
The rules are aimed at minimising tax avoidance for investments made by entities based in tax havens.
The confusion over GAAR arose after the government in a response to a question raised in Parliament on Friday, said that GAAR will be applicable from April 1, 2015.
GAAR is a set of general rules enacted so as to check the tax avoidance.
It empowers the revenue authorities in a country to deny the tax benefits of transactions which do not have any commercial substance or consideration other than achieving the tax benefit.
GAAR is in force in countries such as USA, UK, Australia, Germany, France, Canada, New Zealand and South Africa.
On concerns that a flat 20 per cent tax on debt mutual funds has been proposed with retrospective effective from April 2014, the Revenue Secretary said, CBDT will issue necessary clarification in this matter...There is no retrospectivity at all.
With a view to remove tax arbitrage, Finance Minister Arun Jaitley had proposed to increase the rate of tax on long term capital gains from 10 per cent to 20 per cent on transfer of units of debt mutual funds.
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