NEW DELHI/MUMBAI Nov 16 India is planning to
announce the finalised amendments to the controversial rules on
tax evasion for foreign investors in the next 7-10 days, Finance
Minister P. Chidambaram said on Friday, without specifying the
details of what will be announced.
The final shape of the general anti-avoidance rules (GAAR)
is widely expected to be based on the draft report submitted by
the Shome committee, which was set up following the outcry
created by the regulations targeting companies and investors
routing money through tax havens.
The Shome committee report proposed to delay the
implementation of GAAR by three years, which helped soothe
investor concerns about the measures.
Restoring the confidence of investors overseas is crucial at
a time when India needs foreign flows to bridge its current
account deficit, and support the rupee and stock
"A decision has been taken on GAAR. The draft has been sent
to the prime minister. Hopefully, the decision will be made
public in next 7-10 days," Finance Minister Chidambaram said on
the sidelines of a news conference.
The final amendments to GAAR would come weeks after they
were initially expected given perceptions of a lack of consensus
among various government agencies, including tax authorities.
The government has previously clarified sections of the GAAR
rules, which as originally unveiled in March had raised
complaints among foreign investors about the vague wording and
lack of clarity.
The GAAR proposal aims to target tax evaders, partly by
stopping Indian companies and investors from "round-tripping",
or routing investments through Mauritius and other tax havens.
(Reporting by Rajesh Kumar Singh in NEW DELHI and Archana
Narayanan in MUMBAI; Editing by Rafael Nam and Sunil Nair)