Press Release, dated 9-10-2012

Report of the Expert Committee on Retrospective Amendments made by the Finance Act, 2012 to Income-Tax Act, 1961 Relating to Taxation of Non- Residents on Indirect Transfer; Comments and Suggestions on the Draft Report to be submitted by 19-10-2012

What this is

Press Release, dated 9-10-2012 was issued by the Central Board of Direct Taxes on 9 October 2012. Its subject is Report of the Expert Committee on Retrospective Amendments made by the Finance Act, 2012 to Income-Tax Act, 1961 Relating to Taxation of Non- Residents on Indirect Transfer; Comments and Suggestions on the Draft Report to be submitted by 19-10-2012.

What it does

Puts the draft report of the Expert Committee on the retrospective amendments made by the Finance Act, 2012 on taxation of non-residents on indirect transfers into the public domain and invites comments. The Committee was constituted by notification dated 17 July 2012 on the General Anti-Avoidance Rules, and its terms of reference were widened by notification dated 1 September 2012 to examine the amendment on taxation of a non-resident's transfer of assets where the underlying asset is in India, in the context of all non-resident taxpayers. Comments were to be sent by 19 October 2012 to the Joint Secretary (Tax Policy and Legislation-II), CBDT.

Why it was issued

The Committee had submitted a draft report reflecting consultations and written representations from tax advisory firms, chambers of commerce and industry, foreign investor associations and industry representatives, and the Government wished to take comments from stakeholders and the public before forming a view.

Who it reaches

Non-residents transferring shares of foreign companies deriving value from Indian assets
Foreign investor associations and industry bodies making representations
Advisers tracking the fate of the 2012 retrospective amendments

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.

Report of the Expert Committee on Retrospective Amendments made by the Finance Act, 2012 to Income-Tax Act, 1961 Relating to Taxation of Non- Residents on Indirect Transfer; Comments and Suggestions on the Draft Report to be submitted by 19-10-2012
Press Release, dated 9-10-2012
Vide notification dated July 17, 2012, an Expert Committee was constituted on General Anti-Avoidance Rules (GAAR) to undertake stakeholder consultations and finalize the guidelines.
Subsequently vide notification dated September 1,2012 the Government modified the Terms of Reference of the Committee to include an additional item "to examine the applicability of the amendment on taxation of non-resident transfer of assets where the underlying asset is in India, in the context of all non-resident taxpayers".
The Committee has submitted its draft report on indirect transfer, which reflects consultations and written representations from a number of stakeholders including tax advisory firms comprising accountants and lawyers, chambers of commerce and industry, foreign investor associations and individual industry representatives.
The views expressed in Report of the Committee are that of an independent Committee and it should not be construed in any manner whatsoever as the views of the Government.
The report of the Committee has been uploaded on the Finance Ministry website (www.finmin.nic.in) and Income-tax Department website (www.incometaxindia.gov.in) for comments from stakeholders and the general public.
The comments and suggestions on the draft report may be submitted by 19th October, 2012 at the email address (jstpl2@nic.in) or by post at the following address with "comments on Expert Committee Report on Retrospective Amendments" written on the envelope.
Joint Secretary (Tax Policy & Legislation-II)
Central Board of Direct Taxes,
Department of Revenue,
Room No.147-C, 1st Floor,
North Block, New Delhi-110 001
The views of the Government on the recommendations of the Expert Committee will be formed after receipt of their final Report.
■■

What to watch

This is a press release inviting comment, not Board authority, and it decides nothing.
The press release itself says the Committee's views are those of an independent Committee and are not to be read as the views of the Government.
The comment period closed on 19 October 2012, so the document is spent as an invitation.
The Government was to form its views only after the final report, which is not part of this text.

Where you meet it

Only as background where the history of the indirect transfer amendments is being traced; it is of no operative use in an assessment or appeal.

← F. No.500/154/2009-FTD-I, dated 16-10-2012 · Press Release No. 402/92/2006-MC (25 OF 2012), dated 8-10-2012 →

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.