Amendments to GAAR, the controversial law against tax avoidance through foreign investments, have been finalised, finance minister P Chidambaram disclosed on Sunday.
“I have finalised the amendments to the Chapter 10A of the Income Tax Act. Now it will go to the PMO and then we should be ready with the amendments and then the GAAR rules will reflect the amended Chapter 10A. That is under preparation and I think the work is almost complete. The drafting work is complete. So, GAAR is under control. I have taken the decisions, subject to Prime Minister's approval and then Cabinet," he said in an interview.
Chapter 10A of the Income Tax Act deals with taxation of investments. GAAR (General Anti-Avoidance Rules), which was proposed in 2012-13 budget with a view to preventing tax evasion, evoked sharp reactions from foreign as well as domestic investors who feared that unbridled powers to taxmen would result in harassment of investors.
The government later appointed a committee headed by tax expert Parthasarthi Shome to look into their concerns.
Chidambaram, during the interview, spoke on a variety of subjects including his optimism on meeting disinvestment and spectrum sales target, confidence on pushing through with reforms measures and the relationship with RBI which he said was not antagonistic.
On the issue relating to retrospective tax amendment on which the Shome Committee had submitted its report, he said: "The CBDT has given its views. I have taken decisions at my level. The drafting is going on. Again it will go to the PMO and then to the Cabinet."
Referring to the Direct Taxes Code (DTC), a bigger matter, he said, "We have now started work. This morning I spent two hours on that. Earlier I had spent several hours. We are looking at it. We have tabulated it...will take final decision."
Cabinet to take up NIB proposal soon
Chidambaram indicated that the proposal to set up the National Investment Board (NIB) for expediting clearance to large projects will soon come up for approval before the Cabinet. "The Cabinet Note is with the Cabinet Secretariat and the Prime Minister's Office. It will be listed before the Cabinet at a time when the PM decides it should be listed. But I saw in some newspapers ... that it is likely to be listed," he said.
Concerned over delays in implementation of several mega projects, Chidambaram had recently proposed setting up of NIB under the