Global investors against use of JAAR
Mumbai: International investors, including MNCs, private equity firms, and venture capital funds, have expressed their concerns to Indian tax authorities regarding the use of the judicial anti-avoidance rule, JAAR, to deny tax relief. The rule was invoked to disallow tax benefits claimed by at least three Mauritius investors on the sale of grandfathered shares, which are stocks acquired before April 1, 2017.
ASIFMA, an influential industry body representing international investors, met CBDT officials about a week ago to voice their concerns. The ASIFMA believes that the use of JAAR is against New Delhi's intent and should be addressed promptly. However, it may be challenging for CBDT to resolve the issue through a circular, as it may face legal hurdles.
According to the investors, the use of both GAAR and JAAR, which are anti-abuse provisions, is problematic because they are invoked against investors who create artificial structures to avail tax benefits. The CBDT is of the view that any regulatory changes to prevent JAAR from being used in matters protected from GAAR should be done through a change in law.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
