Press Information Bureau

Government of India

Ministry of Finance

29-November-2012 14:59 IST

The GAAR (General Anti-Avoidance Rule) provisions have not been put on hold. The Finance Act, 2012 had provided that these provisions shall be effective from the 1st day of April, 2014 and apply to Assessment year 2014-15 onwards.

One of the recommendations of the Parthasarathi Shome Committee is that GAAR should be deferred for 3 years. The Committee has cited the following reasons for suggesting this deferral:

‘The implementation of GAAR may be deferred by three years on administrative grounds. GAAR is an extremely advanced instrument of tax administration – one of deterrence, rather than for revenue generation – for which intensive training of tax officers, who would specialize in the finer aspects of international taxation, is needed’.

This was stated by the Minister of Finance, Shri S.S.Planimanickam in a written reply to a question in the Rajya Sabha today.

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DSM/RS/ka

General Anti-Avoidance Rule remains scheduled to commence despite committee recommendation for a multi year deferral citing administrative and training needs. The press release confirms that the General Anti-Avoidance Rule (GAAR) provisions remain scheduled to take effect as enacted under the Finance Act, 2012 and have not been put on hold, while noting a committee recommendation to defer implementation on administrative grounds because GAAR requires intensive training and specialised tax officer capacity in international taxation.