THE expert committee on GAAR (General Anti Avoidance Rules), headed by Dr Parthasarathi Shome, has initiated the process of consultations with various stakeholders of the industry to solicit their respective suggestions and concern on the draft proposals. Meanwhile, a group of leading US based MNCs has expressed its concern over the draft proposals as too vague. The US Council For International Business (USCIB), a leading industry group, having more than 300 top US-based global companies as members, is lobbying hard in presenting its reservations on the draft proposals before the Ministry of Finance.

The USCIB has expressed its deep concern that the draft proposals are too vague to provide certainty to investors. USCIB has stated that the overriding powers of the GAAR provisions can lead to an unilateral amendment of the India-USA DTAA. USCIB also commented that role of a three-member panel, whose approval is necessary for the tax administration to proceed with a GAAR case has not been properly clarified. It seems that the draft proposals have frightened US MNCs the most, showing their gross reluctance to the implementation of the GAAR regime in India.