Getting ready to roll out the General Anti-Avoidance Rules (GAAR) from April next year, the Finance Ministry on Friday initiated the consultation process for the anti-evasion regime and asked stakeholders to send in their doubts based on which, it would issue detailed clarifications.

“Several stakeholders and industry associations have represented that guidelines for implementation of GAAR be issued so that there is adequate clarity in this regard,” said the Central Board of Direct Taxes (CBDT), adding that such inputs may be sent in by June 30.

The GAAR provisions shall be effective from assessment year 2018-19 onwards or the financial year 2017-18. The industry and consultants have raised a number of queries in the past and have asked the CBDT to issue clear guidelines to remove doubts on the implementation of GAAR.

The issue has come into focus with India and Mauritius signing an amended protocol for the Double Tax Avoidance Agreement that withdrew the capital gains exemption.

India also plans to sign similar revised tax pacts with Cyprus and Mauritius but doubts have arisen over the implication of GAAR on these treaties.

Minister of State for Finance Jayant Sinha and Revenue Secretary Hasmukh Adhia had also met foreign portfolio investors on the issue and the Finance Ministry will come out with a detailed circular.

Former Finance Minister Pranab Mukherjee had proposed to introduce GAAR in the Union Budget 2012-13 to check tax evasion and avoidance. But, it was repeatedly postponed because of the apprehensions expressed by foreign investors.

FATCA and CRS Meanwhile, in a separate circular, the CBDT has clarified doubts on Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standards (CRS), based on its interaction with financial institutions.

It has clarified that valuation of securities may be done at the values regularly communicated by depository to the depository participants and brokers.

To help financial institutions get physical self certification from their large number of account holders, it has further said that self-certification can also be obtained through Internet banking platform from the user account where the customer has transaction rights.

On the issue of Tax Identification Number (TIN), it has said that the financial institutions need not collect it if it is not issued by the country where the person is resident for tax purposes.

“It is also clarified that TIN is not required to be collected by the FIs even from a person (resident for tax purposes in a country or territory outside India) who may be eligible to obtain a TIN in his country or territory of residence, but has not yet obtained it,” said the CBDT, adding that financial institutions should get the TIN when the person obtains it. “The clarification on the valuation of securities will help financial institutions to determine the reportable amount especially in case of custodial accounts. This will help reporting of unlisted securities,” said Bahroze Kamdin, Partner, Deloitte.

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