Press Release, dated 29-11-2012

What it does

States, in answer to a question in the Rajya Sabha, that the general anti-avoidance rules have not been put on hold: the Finance Act, 2012 provided that they take effect from 1 April 2014 and apply from assessment year 2014-15. It records that the Parthasarathi Shome Committee had recommended deferring them by three years on administrative grounds, the Committee having said that these rules are an advanced instrument of deterrence rather than revenue generation, requiring intensive training of officers specialising in international taxation.

Why it was issued

It answers a parliamentary question, correcting the impression that the provisions had been put on hold.

Who it reaches

Taxpayers planning arrangements around the commencement of Chapter X-A
Advisers tracking when the general anti-avoidance rules would first apply

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

General Anti-Avoidance Rules
Press Release, dated 29-11-2012
The GAAR (General Anti-Avoidance Rule) provisions have not been put on hold. The Finance Act, 2012 had provided that these provisions shall be effective from the 1st day of April, 2014 and apply to Assessment year 2014-15 onwards.
One of the recommendations of the Parthasarathi Shome Committee is that GAAR should be deferred for 3 years. The Committee has cited the following reasons for suggesting this deferral:
'The implementation of GAAR may be deferred by three years on administrative grounds. GAAR is an extremely advanced instrument of tax administration - one of deterrence, rather than for revenue generation - for which intensive training of tax officers, who would specialize in the finer aspects of international taxation, is needed'.
This was stated by the Minister of Finance, Shri S.S. Planimanickam in a written reply to a question in the Rajya Sabha today.
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What to watch

This is a press release recording a ministerial reply in Parliament, not Board authority, and it changes nothing.
It confirms the statutory position as it then stood, from assessment year 2014-15, and does not itself defer or advance that date.
The Committee's recommendation of a three-year deferral was only a recommendation at that stage, and the reply does not accept it.
The date it states was later altered by legislation, so it cannot be relied on for the commencement that finally applied.

Where you meet it

Only as background on when the general anti-avoidance rules were expected to come into force.

← Circular No. Office Order [F. NO. 19-AD(ATD)/2012], dated 13-12-2012 · Instruction [F.NO. DIT(S)-III/CPC/2012-13], dated 27-11-2012 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.