GAAR to be finalised after consultation with PMO: FinMin

Within hours of the PMO issuing a statement saying that the draft GAAR rules were not seen by Prime Minister Manmohan Singh, a top finance ministry official said on Friday the guidelines will be finalised after consultation
with the PM's office.

"Don't read too much into the release by the PMO. The PM has not applied his mind (on the draft GAAR guidelines)," Finance Secretary R S Gujral said when asked why the the Prime Minister's Office issued a press release on GAAR.

The Finance Ministry, late Thursday night, came out with draft guidelines on General Anti Avoidance Rule -- a budgetary proposal to check tax evasion.

The draft rules seek to address investor concerns over the proposed tax law. Besides other things, the draft said, there would be a threshold limit for invocation of GAAR and it would apply on income accruing after April 1, 2013.

"These

are draft guidelines . . . Obviously the final guidelines will be after consultation with the PMO. . . . Suggestions from stakeholders will be taken in consideration and finally it has to be decided by the minister in charge," Gujral added.

The Finance Ministry has invited stakeholder comments on the draft rules till July 20, 2012.

Distancing itself from the draft guidelines, the PMO earlier in the day said that these were not seen by Singh, who assumed charge of the Finance portfolio earlier this week.

"These (draft guidelines) have not been seen by the Prime Minister and will be finalised with the approval of the Prime Minister, who holds the Finance portfolio, only after considering the feedback received," the PMO said in a release.

The Ministry came out with the draft guidelines after wide consultation with stakeholders and official of the International Taxation department.

The next meeting of rule making committee of GAAR is on July 9, Gujral said.