PMO has not distanced itself from GAAR: Montek

PMO has not distanced itself from GAAR: Montek New Delhi: The Prime Minister's office has not distanced itself from the controversial GAAR proposal but due care will be taken while implementing it, the Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

"There is no distancing (from the GAAR issue). I would call that a clarification. It is not true that we are rushing the GAAR guidelines in a hurry," Ahluwalia said.

Following protests from foreign and domestic investors, the government had postponed the implementation of the General Anti Avoidance Rules (GAAR) by one year till April 1, 2013.

Former Finance Minister Pranab Mukherjee had proposed GAAR in his budget this year to check tax evasion.

In order to seek public comments, the Finance Ministry has recently come out with draft guidelines for GAAR. However soon after that, the PMO said in a statement that Prime Minister Manmohan Singh has not seen the draft.

"Comments will be received and the Prime Minister will actually see what should be done based on comments received on the draft guidelines that have been released," Ahluwalia told a private news channel.

He was apparently replying to reaction to his earlier comments in which he acknowledged GAAR was going to create a problem. He had also said that all uncertainties amongst the investors will be resolved.

On implementation of the Goods and Services Tax (GST), Ahluwalia expressed hope it will be done next year.

"I would hope that by the time we start the next year we should be able to say that there is progress. I hope it will be done," he replied when asked if GST be expected next year.

"In the entire tax front, in my view, apart from taking care of the short term problems of uncertainties associated with GAAR which they are doing, the single most important thing is GST," he explained.

"In my view, the importance of the GST is not whether it happens in the next 6 months. Rather, uncertainty is removed that the GST is going to happen," he added.

On the reforms to push growth further, he explained that in his view reforms are things like getting done the GST, FDI in retail, etc besides other new initiatives and not the thing possible under existing policy.

The GST will be a single indirect tax which would subsume existing central excise duty, services tax, and state taxes including value-added tax, entry tax and purchase tax.

The government has tabled in Parliament, constitutional amendment bill to roll out the GST.

It was referred to a Parliamentary Standing Committee headed by former Finance Minister and senior BJP leader Yashwant Sinha, for giving comments and recommendations. The committee is yet to submit its report.