The Report of Expert Committee on GAAR chaired by Dr Parthasarathi Shome is most encouraging. CII has been advocating a postponement in the introduction of GAAR. We see that the Committee has accepted this recommendation, which is most welcome.
The Report addresses the issues of grandfathering of existing tax incentives and concessions, independence of GAAR approving panel and clarifies concepts like commercial substance, etc. These have been strong recommendations of CII and we are delighted that the Committee has considered these suggestions favourably.
CII is also happy to note that its recommendation that the approving panel must be independent has been considered and the Expert Committee has suggested a 5 member approval panel of which 3 members will be outside of the Department of Revenue and the Chair will be a retired Judge. CII’s another major recommendation that the existing tax incentives must be grandfathered has been considered as this will help reverse the loss of investors’ confidence.
The report is especially laudable since ambiguity in the earlier guidelines in terms of use of words such as Commercial substance, have been addressed by providing a clear definition of these words.
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