The GAAR Dimension of Anti-Avoidance: Possibilities in India

TPIR, 08/09

9 Pages Posted: 24 Apr 2015

See all articles by Dhruv Sanghavi

Dhruv Sanghavi

affiliation not provided to SSRN

Date Written: March 6, 2009

Abstract

"An important feature of the GAAR is the threat of it's use. If you step outside the lines of reasonable behaviour, and engage in tax planning that is aggressive, the rule will be applied. The deductions you seek will be denied. That's a very important important step. It's a very important sword over the heads of taxpayers." (Mr. Benner, Assistant Deputy Minister in Canada's Department of Finance, in testimony before the Committee of Public Accounts [Canada 1992, Vol. 37 19]). Frustrated with the haphazard approach in challenging avoidance transactions, the Canadian Ministry of Finance opted to enact the General Anti-Avoidance Rule as an ad hoc rule against tax avoidance transactions. While examining the evolution and effectiveness of the GAAR in Canada, this paper questions the extent to which such a GAAR may be effective in resolving its intended purpose in India.

Keywords: General Anti-Avoidance Rule, GAAR, The Constitution of India, Income Tax Act 1961, Tax Planning, Tax Avoidance, Stubart, Canada Trustco, MIL (Investments) SA, Azadi Bachao Andolan, Vodafone Tax Controversy, International Taxation, Tax Treaties

JEL Classification: H20, H30

Suggested Citation

Sanghavi, Dhruv, The GAAR Dimension of Anti-Avoidance: Possibilities in India (March 6, 2009). TPIR, 08/09, Available at SSRN: https://ssrn.com/abstract=1701551

Dhruv Sanghavi (Contact Author)

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