The Confederation of Indian Industry (CII) wants the Parthasarathi Shome panel, which was set up by PM Manmohan Singh in July to address concerns of foreign as well as domestic investors on General Anti-Avoidance Rules (GAAR), to propose that amendments to the Income Tax (IT) Act be made effective prospectively rather than retrospectively.

The government made amendments to the IT Tax Act retrospectively from the year of 1962, with an aim to make deals hit overseas for acquiring Indian assets liable to pay tax to Indian government. This amendment was made after the Supreme Court ruled that the Indian tax department didn't have the right to tax Vodafone for acquiring a stake in Hutchison Essar in an eleven-billion dollar deal abroad.

The panel, headed by Parthasarathi Shome, is all set to submit its report to Union Finance Minister P. Chidambaram today, October 1.

Sources in the finance ministry said, "The final report of the Parthasarathi Shome committee will be submitted to the Finance Minister on October 1, 2012."

Earlier on September 1, the panel had submitted its draft report to the finance minister.

To address the worries of Mauritius-based investors, the panel had recommended in its draft report that the government should maintain the provisions of the CBDT circular on approval of Tax Residence Certificate issued by the government of Mauritius.

Apart from that, the panel suggested GAAR should not be applicable on the monetary threshold of tax benefit of less than Rs 3 crore.