FinMin announces implementation of GAAR deferred till April 2013

Finance Minister Pranab Mukherjee today announced deferment of that implementation of the General Anti-Avoidance Rules or GAAR till April 2013. The proposal was made in the budget for the current fiscal. The rule is being used to check avoidance of tax. 

Introducing the Finance Bill for the current fiscal, Mr. Mukherjee clarified that the government will remove a provision which puts the onus on the tax payer to prove that there has been no tax avoidance. He said now the onus would be on the tax officials. The Finance Minister said the implementation of GAAR has been done away with for now to provide more time to both taxpayers and tax administration. It will now apply to income in the financial year 2013-14 and subsequent years.

The Finance Minister also announced a roll back of the excise levy on all branded and unbranded jewellery with effect from 17th March this year. He said, the imposition of Central Excise duty at the rate of one per cent had attracted public attention. 

Mr. Mukherjee said, the levy was well intentioned and introduced not so much for raising revenue as for rationalising the movement towards Goods and Services Tax. However, the government has decided to withdraw it considering the sentiments of the people both within and outside the House.