The Centre has reiterated that the General Anti Avoidance Rules – aimed at curbing tax avoidance – will come into force on April 1, ignoring industry’s suggestion to defer the rules on account of uncertainty over their applicability and to provide adequate time to prepare for the new regime.
The government’s resolve to stick to the rollout date for the GAAR regime announced in the 2016 Budget was reflected in clarifications issued by the Finance Ministry on Friday.
The Finance Ministry, as part of the clarifications, made clear its rules regarding several issues that the industry had demanded greater clarity on, including the specific cases in which GAAR would apply to Foreign Portfolio Investments (FPI), the treatment of Limitation of Benefits (LOB) clauses and the precedence given to court rulings in such situations.
