GAAR - Scope of the Terms of Reference of the Expert Committee headed by Dr. Parthasarathi Shome ON GAAR Expanded to Include all Non-Resident Tax Payers Instead of Only FIIs

Press Release, dated 1-9-2012

The Standing Committee on Finance has presented its report on Current Economic Situation and Policy Options to Parliament on August 30, 2012. The Committee has inter alia found that the investment climate in the country has suffered serious setback and investors confidence has been hit mainly because of the concerns over the impact of retrospective tax laws and new General Anti Avoidance Rules (GAAR).

The Government had constituted an Expert Committee headed by Dr. Parthasarathi Shome on GAAR on July 13, 2012. The Committee has now submitted its draft report, which has been placed in public domain on September 1, 2012 for seeking suggestions/opinion of the various stakeholders.

The Government had earlier on August 6, 2012 also requested the Expert Committee to examine the applicability of the amendment on taxation of non-resident transfer of assets where the underlying asset is in India, in the context of Foreign Institutional Investors (FIIs) operating in India purely for portfolio investment. It has now been decided to expand the scope of the Terms of Reference of the Committee to include all non-resident tax payers instead of only FIIs.

GAAR - THE EXPERT COMMITTEE HEADED BY DR. PARTHASARATHI SHOME ON GAAR SUBMITS THE DRAFT REPORT; COMMENTS FROM STAKEHOLDERS AND GENERAL PUBLIC INVITED BY 15-9-2012

Press Release, dated 1-9-2012

The Government had constituted an Expert Committee on General Anti Avoidance Rules (GAAR) to undertake stakeholder consultations and finalise the GAAR guidelines as well as a roadmap for implementation.

The Committee, chaired by Dr. Parthasarathi Shome, has submitted its draft report after analysis of the GAAR provisions and noting the concerns expressed by various shareholders. The draft report has recommended certain amendments in the Income-tax Act, 1961; guidelines to be prescribed under the Income-tax Rules, 1962; circular to clarify GAAR provisions along with illustrations; and other measures to improve tax administration specifically oriented towards GAAR matters.

The report of the Committee has been uploaded on the Finance Ministry's website (http://finmin.nic.in) for comments from stakeholders and the general public.

The comments and suggestions on the draft report may be submitted by 15th September, 2012 at the e-mail address (jstpl2@nic.in) or by post at the address: Joint Secretary (Tax Policy & Legislation-II), Room No.152, North Block, Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, North Block, New Delhi - 110001 with "Comments on GAAR Committee" written on the envelope.

PIB Press Release, Setting up of Biotechnology Industry Research Assistance Council

The Union Cabinet today approved the setting up of "Biotechnology Industry Research

Assistance Council (BIRAC)" as 'not-for-profit' section 25 company with a vision to

stimulate, foster and enhance the strategic research and innovation capabilities of the Indian

biotech industry particularly SME's, to make India globally competitive in biotech innovation

and entrepreneurship and to create affordable products and services.

BIRAC will operate with a core budget for its regular activities and recurring expenses for

human resources and operational cost with an initial outlay of Rs.70 crore for two years.

BIRAC is being set up as a separate body for supporting product innovation and providing

required infrastructure and services at different stages of the value chain for promoting

innovation and product development.

BIRAC will provide funding/investment for

• Early and late stage, including Small Business Innovation Research Initiative (SBIRI),

Biotechnology Industry Partnership Programme (BIPP) and Ignition grant.

• Technology transfer and acquisition in national priority areas

• Technology development - incubators, parks

It will also provide support services such as IP facilitation, legal and contracts, regulatory and

clinical trail facilitation; mentoring and capacity building.

The company would function as the Government's, inter-phase agency for supporting

industry -academia interaction, which will service as a single window for the emerging

biotech industry through which they can acquire knowledge, access world class RandD

infrastructure, access rate limiting serious technologies and seek technical problem solving

help regulatory advice.

Background:

The proposal for setting up of an innovation support organisation - Biotechnology Industry

Research Assistance Council (BIRAC) will address the felt need in the government system

for providing a comprehensive enabling environment and technology related service package

to promote, nurture and support medium and high level innovation in biotech research. This

would be particularly useful for small and medium size companies, and also support and

facilitate creation of new start-ups.

PIB Press Release, Dated: 26-11-2011

India and Nepal to Sign Revised Double Taxation Avoidance Agreement; Finance Minister to Leave for a Day’s Visit to Nepal Tomorrow

Double Taxation Avoidance Agreement (DTAA) between India and Nepal will be signed

tomorrow by the Finance Ministers of both the countries in Kathmandu. This Agreement

(DTAA) would replace an earlier Agreement between two countries which was signed way

back in 1987. The Union Finance Minister Shri Pranab Mukherjee will be visiting Nepal on a

day's visit tomorrow at the invitation of the Finance Minister of Nepal Shri Barshaman Pun

'Ananta'. During his visit, the Finance Minister Shri Mukherjee will also call on the Rt

Hon'ble President and Rt Hon'ble Prime Minister of Nepal.

During the visit, the two Finance Ministers will also exchange views on the further

development of bilateral relations and review the progress on implementation of the action

plan agreed upon during the last visit of the Prime Minister of Nepal to India on October 21,

2011.

Direct Tax Press Release No. 402-92-2006-MC (15 of 2011), Dated: 24-06-2011

Direct Tax Press Release No. 402-92-2006-MC (15 of 2011), Dated: 24-06-2011

The Government of India signed a Protocol, amending Double Taxation Avoidance
Agreement (DTAA) with Government of Singapore for effective exchange of information in
the tax matters on 24th June, 2011. The Protocol as signed by Shri Prakash Chandra,
Chairman, Central Board of Direct Taxes on behalf of the Government of India and Ms.
Karen Anne Tan Ping Ming, High Commissioner of Singapore to India, on behalf of the
Republic of Singapore.

The negotiations for entering into an amending Protocol was completed in one round at
Singapore. Both India and Singapore have adopted internationally agreed standard for
exchange of information in tax matters. This standard includes the principles incorporated in
the new paragraphs 4 and 5 of OECD Model Article on 'Exchange of Information' and
requires exchange of information on request in all tax matters for the administration and
enforcement of domestic tax law without regard to a domestic tax interest requirement or
bank secrecy for tax purposes.

In the aftermath of the global financial crisis, there is increased recognition on part of
Governments that improvements in exchange of information in tax matters are a part of a
broader agenda to improve transparency and global governance. There is recognition that
effective and comprehensive exchange of information in tax matters is a vital part of the
ongoing efforts of revenue authorities to tackle international tax avoidance and evasion.
Towards that end, India and Singapore joined hands for effective exchange of information
including banking information.

This amending Protocol will go a long way in strengthening relationship between India and
Singapore and facilitate mutual co-operation by effective exchange of information in tax
matters between two countries.