Press Information Bureau

Government of India

Ministry of Finance

15-May-2012 18:02 IST

Amendments Proposed in Provisions Relating to GAAR

The following government amendments have been proposed in the provisions relating to General Anti-Avoidance Rules (GAAR) contained in the Finance Bill 2012.

i) To remove the onus of proof from the tax-payers to the Revenue Department before any action can be initiated under GAAR.

ii) To introduce an independent member, not below the rank of Joint Secretary from the Ministry of Law, in the GAAR approving panel to ensure objectivity and transparency.

iii) To provide that both resident or non-resident tax-payers can approach the Authority for Advance Ruling (AAR) for a ruling as to whether any arrangement to be undertaken is permissible or not under the GAAR provisions.

iv) To provide more time to both tax payers and the tax administration to address all related issues, it is proposed to defer the applicability of GAAR provisions by one year i.e. with effect from financial year 2013-14.

This information was given by the Minister of State for Finance, Shri S.S. Palanimanickam in written reply to a question in Rajya Sabha today.

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DSM/SS/Hb

General Anti-Avoidance Rules: proposed shift of burden, independent panel member, widened AAR access and deferred applicability. Proposed amendments adjust General Anti-Avoidance Rules procedure by shifting the initial burden of proof to the revenue authority, adding an independent law ministry member to the GAAR approval panel for objectivity, permitting residents and non-residents to seek pre-transaction rulings from the Authority for Advance Ruling on GAAR applicability, and deferring the rules' operative applicability to allow stakeholders more time to address related issues.