Experts and industry observers have said that the recently government decision to delay the implementation of the general anti-avoidance rule (GAAR) to April 2016 is welcome step for the investors.

The union government delayed the implementation of the controversial new rules on the basis of the recommendations of the Shome Committee, which was formed to extensive consultations with the stakeholders and presenting a framework for the implementation of the rules. The government ahs wholly accepted the re commendations of the Committee.

Finance minister P Chidambaram has said on Monday that the government has decided to defer the GAAR by two years to April, 2016. The time will allow the investors to alter their structures in order to ensure that the GAAR would impact their investments. Chidambaram also pointed out that the same income will not be taxed twice under the tax regime in the country and investments made before Aug 2010 will be grandfathered.

Chidambaram said that the investor concerns relating to the GAAR have been addressed with a number of changes incorporated into its clauses. Industrial members had earlier said that the implementation of the GAAR should be deferred as economic conditions in the country and the world are not adequate for a change in taxation policy. The GAAR has been criticized by the industry members as well as foreign investors as counterproductive for business sentiment in India.