FinMin will clear GAAR cloud quickly: Montek

The finance ministry under Prime Minister Manmohan Singh will very quickly “resolve” uncertainty among investors caused by anti-tax avoidance rules which were unveiled in the Budget, planning commission deputy chairman Montek Singh Ahluwalia said on Sunday. Pragmatic approach

The finance ministry under Prime Minister Manmohan Singh will very quickly “resolve” uncertainty among investors caused by anti-tax avoidance rules which were unveiled in the Budget, planning commission deputy chairman Montek Singh Ahluwalia said on Sunday.

“As soon as Budget was presented, it was clear that General Anti Avoidance Rules (GAAR) is going to create problem,” he said in an interview to Karan Thapar’s Devil’s Advocate programme aired on CNN-IBN.

However, he said, the finance ministry, now under the Prime Minister, "will resolve uncertainty among investors".

When asked if former finance minister Pranab Mukherjee was a problem, he said, “No, I think this is something we don’t want to be carried away ... newspapers are always trying to put one minister against another.

“The Art of taxation is difficult ... you have to give credit to the previous finance minister, after all he postponed the application of GAAR”.

GAAR is a larger issue, he said, and “caused lots of uncertainties among investors ... The government actually recognised that by postponing implementation of GAAR”, adding that the finance ministry’s draft guidelines on GAAR have taken care of some of the problems.

On retrospective tax amendments, Ahluwalia said he does not think it was introduced because of Vodafone.

“It is possible that the high profile attention Vodafone got complicated everything else. I am talking about all the other things,” he said.