tag:blogger.com,1999:blog-2128859103258265367.post7596455872813335047..comments2024-03-07T20:42:19.599+05:30Comments on വര്ക്കേഴ്സ് ഫോറം: Appeasing Foreign Speculatorsവര്ക്കേഴ്സ് ഫോറംhttp://www.blogger.com/profile/00731641929122914433noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2128859103258265367.post-56404784104069192092012-09-12T23:08:03.608+05:302012-09-12T23:08:03.608+05:30IN his speech introducing the 2012-13 budget, the ...IN his speech introducing the 2012-13 budget, the then finance minister Pranab Mukherjee had declared his intention to introduce a General Anti-Avoidance Rule (GAAR) to counter “aggressive tax avoidance schemes”. What GAAR means is that even if a transaction appears to be legally valid, if it is entered into for the sole purpose of tax avoidance, then the Indian tax authorities can deny tax benefit to the concerned entity. GAAR had become necessary not only because of the enormous tax revenue lost to the country, but also because India had acquired the dubious reputation, normally associated with “banana republics”, of being a country at whose tax administration multinational corporations could cock a snook with impunity. The bulk of India’s foreign capital inflows for instance was routed through Mauritius, which is a “tax haven”, but with which India has a double tax avoidance treaty, stipulating that taxes must be paid in the country of domicile (not operation), so that no tax need be paid on gains made in India on FDI or FII so routed!വര്ക്കേഴ്സ് ഫോറംhttps://www.blogger.com/profile/00731641929122914433noreply@blogger.com