Many investors thought that by deferring GAAR by a year, the finance minister Pranab Mukherjee has “blinked”.
But in his speech to Parliament today, he said the following:
GAAR I had agreed to defer one year not because of any fear or apprehension. I may be a very small man, very little man but one thing I can assure and I can tell the distinguished members of Parliament that I am not afraid of any consequences.
The last point, which was referred to by Shri Advaniji, is about the operation against black money. My whole argument on the Vodafone was on that point. It is because my point is very simple. I would like to be guided either by the Double Taxation Avoidance Agreement or tax. There cannot be a situation where somebody will make money on an asset located in India and will not pay tax either to India or to the country of its origin by making some arrangements to certain tax haven areas, to certain tax haven locations through a complicated setting up of a series of subsidiaries, and having huge capital gains on the assets located in India.