New Delhi, May 7 (IANS) Relenting under pressure from the business community, Finance Minister Pranab Mukherjee Monday proposed to defer the implementation of the controversial General Anti-Avoidance Rule (GAAR) for a year.
"To provide more time to both tax payers and tax administration to address all related issues, I propose to defer the applicability of GAAR provision by one year," Mukherjee said while initiating the debate on Finance Bill for 2012-13.
"The GAAR provision will now apply to income of financial year 2013-14 and subsequently," he said.
The finance minister also proposed to amend the controversial parts of the proposed legislation, especially regarding the onus of proof.
Mukherjee said now the onus of proof would not entirely be on the tax payers but will also be on the tax authority.
The finance minister also proposed to appoint an independent member in the GAAR approving panel to ensure objectivity and transparency. One member of the panel would be officer of the level of joint secretary or above from the law ministry.
"To provide greater clarity and certainty in the matters relating to GAAR, a committee has been constituted under the chairmanship of Director General of Income Tax to give recommendations for formulating the rules and guideline for implementation of GAAR provision and to suggest safeguards so that the provisions are not applied indiscriminately," Mukherjee said.
In the budget for financial year 2012-13 presented March 16, the finance minister had proposed to introduce the General Anti-Avoidance Rules (GAAR).
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