The Chambers of Commerce and Industry have welcomed the draft guidelines on General Anti-Avoidance Rules – GAAR – as encouraging and progressive. Confederation of Indian Industry Director General Chandrajit Banerjee said, the CII has been advocating a postponement in the introduction of GAAR. Another leading chamber FICCI has hoped that the draft would lead to bold policy decisions aimed at restoring confidence and reviving growth.

The expert committee on General Anti Avoidance Rules – GAAR – has recommended postponement of the controversial tax provision by three years. It has also called for abolition of capital gains tax on transfer of securities.

The Committee, headed by Parthasarathi Shome, has recommended that GARR be applicable only if the monetary threshold of tax benefit is 3 crore rupees and more.

The draft report, which has been submitted to the Finance Ministry, has also sought comments from the stake holders by September 15. The Shome Committee was set up by Prime Minister Dr. Manmohan Singh to address the concerns of foreign investors.

The Finance Ministry has expanded the scope of the terms of reference of the committee to include all non-resident tax payers instead of only Foreign Institutional Investors.