The finance minister has rejected the Shome Panel's recommendation to defer GAAR by 3 years. Instead Chidambaram is in favour of rolling out GAAR from April 2014, reports Aakansha Sethi quoting sources.
GAAR was already deferred by one year and it was to come into effect from April 2013. Now, it is being deferred by another year to April 2014.
Also read: GAAR amendments finalised: Chidambaram
But, this decision is now going to be sent to the Prime Minister's Office (PMO) for a final ratification and the ball is now in the Prime Minister's court because he will decide whether the government will go ahead with the one year deferral or not.
Also, the CBDT had strongly opposed the deferral of GAAR. They wanted GAAR to be introduced from April 2013 itself. Hence, by deferring GAAR by one year, it has caused a lot of concern among investors.
However, at a time when the government is being charged with corruption and the issue of black money is cropping up every now and then, something like tax avoidance is not an issue that the government can push for too long.
Also, a decision has been taken on the approving panel. The Shome committee had recommended a five member panel with two members from outside the income tax department, including people from fields like business, accountancy etc. That suggestion has been accepted and will come as good news for the industry.