Govt publishes draft guidelines on controversial GAAR norms

The guidelines, put out by the finance ministry, said the provisions of the general anti avoidance rules (GAAR) will apply from April 1, 2013 and the onus of proving tax liability under the rules will be on the tax department.

The rules, meant to cover companies and investors that route investments through tax havens such as Mauritius, had sparked an outcry among foreign investors when the government first proposed it in the federal budget in March this year.

Foreign investors had then complained that the wording of the rules was vague and could be misused, forcing the government to defer their implementation until 2013.