GAAR to be implemented from FY 2017-18: Govt

The government said that GAAR would be effective from financial year 2017-18.

The Dollar Business Bureau

The government on Friday said that GAAR (General Anti-Avoidance Rules) would be effective from the financial year 2017-18, bringing up the possibility of further delay of the dreaded rules.
The Income tax department, in a series of tweets, said, “The GAAR provisions mentioned in the Income Tax (I-T) Act shall come into effect from the financial year 2017-18 onward. Public in general and the stakeholders are requested to submit their inputs with regards to GAAR provisions that require more clarity.”
In the last Union Budget, Finance Minister Arun Jaitley, agreed to the demands from its international investors and delayed GAAR’s implementation by two years to fiscal year 2017-18 (assessment year 2018-19) and succeeding years. The anti-tax avoidance regulation is meant to cut tax avoidance for investments done by entities, based in tax havens.
The Ministry of Finance has now stated that if the stakeholders’ inputs are related to interpretation of a particular arrangement or structure, the arrangement should be one that generally arises in the sector and requires explanation with regard to general principles of application. Besides, with regard to such an arrangement, the specific provision and doubts or apprehensions, in addition to the basis thereof, can also be given with all the related facts.
The stakeholders can provide their comments till June 30. The GAAR provisions are mentioned in Chapter X-A of the Income Tax Act, 1961. The government said that the required procedures for application of GAAR and conditions, under which it shall not be applicable, have been contained in Rules 10U-10UC of the I-T Rules, 1962.
The provisions of GAAR have been first proposed in the Direct Taxes Code. They were postponed from time-to-time in order to understand the impact of these provisions.

 
TDB Top