GAAR may not apply to Singapore, Mauritius investments

Investors coming via Mauritius and Singapore may breathe easy, as the provisions of the General Anti-Avoidance Rules (GAAR) may not apply to their transactions. The government will also spare those foreign institutional investors (FIIs) who route their investments through tax havens, and are genuine residents of tax havens. To end uncertainty, a clarification will also be issued on retrospective amendments.A decade-old circular that prohibits the tax department from probing the veracity of a person claiming to be a resident of Mauritius to avail of treaty benefits may not be withdrawn. Earlier, the finance ministry was planning to withdraw it or provide a clarification that GAAR would override circular 789.

Source: Business Standard