NEW DELHI: The expert committee on General Anti Avoidance Rules (GAAR) has proposed delay of the tax provision by three years and also abolition of capital gains tax on the transfer of securities.
The panel in its draft report recommended that GAAR provisions need not be invoked to review the genuineness of the residency of Mauritius entities.
Mauritius is considered as a sought after route for foreign investments due to the liberal taxation regime. India enjoys a double taxation avoidance treaty with Mauritius.
The Committee is headed by Parthasarathi Shome it proposed that GAAR should become applicable if the compulsory threshold of tax benefit stands at Rs 3 crore and above.
The draft report has been submitted to the Finance Ministry and it demanded comments from the stakeholders by September 15. The Shome Committee has been established by Prime Minister Manmohan Singh to look into the issues of foreign investors.