Economy

Shome panel submits final report on indirect transfers

Our Bureau New Delhi | Updated on October 31, 2012 Published on October 31, 2012

Chidambaram to meet FIIs today





The Shome Committee has submitted its final report on retrospective amendments relating to indirect transfers.

This report was electronically submitted to Finance Minister P. Chidambaram on Wednesday, it is learnt.

The recommendations in the final report are largely in line with the proposals made in the draft report, which was submitted in early October.

The Finance Ministry had given time until October 19 for the stakeholders to respond to the draft report.

In the draft report, the Shome Panel had recommended that any taxation involving indirect transfer of assets located in India should be prospective and not retrospective.

Also, the committee said that retrospective application of law should happen in exceptional or the rarest of rare cases.

If the Government opts for retrospective taxation of indirect transfers, no burden should be fixed on the payer for non-deduction of tax at source, the panel had said.

Finance Minister P. Chidambaram will meet representatives of top foreign institutional investors (FIIs) on Thursday.

The meeting will focus on the steps that may be needed to further boost sentiments in the financial markets.

Indications are that the meeting will also discuss issues on Shome Panel recommendations on General anti-avoidance rules (GAAR) and retrospective amendments on indirect transfers.

The Shome Committee had recommended that GAAR be postponed by three years. The statute book currently provides that GAAR will come into force from April 1, 2013.

The Government is yet to take a final call on the Shome Panel recommendations. Chidambaram will leave New Delhi on Thursday night for a week-long official visit to Seoul and Mexico.

The Finance Minister is likely to hold bilateral discussions with his counterpart in Seoul and then travel to Mexico for the G20 meeting, sources said.

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Published on October 31, 2012
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