GAAR & DIRECT TAX CODE (DTC) BY – SHRADDHA SHARMA MA ECONOMICS FINAL YEAR (3rd SEMESTER) Vasanta College for Women, Affiliated to Banaras Hindu University GAAR General Anti Avoidance Rule – anti tax avoidance law under chapter X – A, income tax act, 1961  Proposed in the DTC 2009 and the other subsequent DTC’s  Introduced by – finance minister Pranab Mukherjee on 16th March 2012  To avoid the misuse of the tax avoidance treaty or laws that India had  To check revenue losses that the government incurred  Address the unethical but legal practise of tax avoidance  VODAFONE        Made a deal to buy Hutchison – Essar (in the Indian market in 2007. 67% of its share was with ‘Li ka Shing’ holdings in Hutch – Essar, and 33% was with Hutch – Essar only. The treaty between Vodafone & li ka Shing happened n Cayman island It did not pay “TDS & capital gains” in India. This lead the government to register a case against them on the ground of heavy tax lose. Mumbai court gave a verdict in the governments favour But when it was challenged in supreme court the government lost the case. PARTHASARTHY SHOME PANEL Set up by prime minister Dr. Manmohan Singh in 2012  To draw the final guidelines of GAAR  Recommendations of the panel – a) Postponement of GAAR by 3 years b) Apply it to business arrangement with a tax benefit exceeding 30 millions c) Investment prior to August w010 – not attract GAAR d) GAAR to come t ...
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