PM distances himself from GAAR draft rules
The draft guidelines issued by the Finance Ministry on General Anti-Avoidance Rules (GAAR) on Friday appeared to have got caught in a controversy with Prime Minister Manmohan Singh distancing himself by saying that he had not approved these.
Barely 12 hours after the guidelines were issued by the Finance Ministry, which is under Singh's direct charge now, the Prime Minister's Office (PMO) issued a statement in the morning asserting that a final call on GAAR will be taken by the Prime Minister after proper feedback.
"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 release said.
"The GAAR guidelines that have been put up on the government website from the official level of the Finance Ministry and shared with some stakeholders are only draft guidelines and have been put out for receiving wide-ranging feedback and for discussion purposes only," it said.
Its suo motu comment came after the Finance Ministry on Thursday night issued draft guidelines on GAAR - a budgetary proposal to check tax evasion - to seek feedback of the stake holders.
The draft guidelines seek to address the concerns of the investors over misuse of the tax proposal. Besides other things, it said that there would be a threshold limit for invocation of GAAR and it would apply on income accruing after April 1, 2013.
In view of the widespread protest against the proposal, former Finance Minister Pranab Mukherjee had postponed its implementation by a year to April 2013.
The Finance Ministry has invited stakeholder comments on the draft rules till July 20, 2012.
When asked to react to the PMO statement, Finance Secretary R S Gujral tried to be dismissive, arguing, "Don't read too much into the release by the PMO." .