Prime Minister Dr Manmohan Singh today expanded the terms of reference of the General Anti-Avoidance Rules, GAAR, committee by referring the issues relating to taxation of Foreign Institutional Investors, FIIs and portfolio investors to it with a view to provide greater clarity to them.

The Prime Minister Office said in a statement that it is necessary to have clarity on the tax liability of portfolio investors and FIIs as a result of this amendment (relating to GAAR), particularly, when the investment is made through a registered stock exchange in accordance with SEBI guidelines and purely in the form of portfolio investment.

Making additional reference to the committee, the statement said any clarification needs to be harmonised with the GAAR guidelines and will have to address any residual concerns outside of GAAR.

Earlier this month, the Prime Minister had set-up a panel headed by ICRIER chief and taxation expert Parthasarathi Shome to bring greater clarity and prepare a roadmap for GAAR by September 30 for its implementation.

Prime Minister Manmohan Singh said the Indian economy is facing difficulties but expressed hope that the challenges will be overcome.



The Prime Minister was the chief guest at a panel discussion on the Challenges of Economic Reforms in India. RBI Governor D Subbarao, Professor of University of Chicago Raghuram G Rajan and Business Standard Chairman T N Ninan have participated in the discussion . The issues concerning declining growth and the impact for eurozone crisis on the domestic economy too figured during the discussion.

The growth rate during 2011-12 slipped to three-year low of 6.9 per cent, mainly on account of global factors. The government proposes to raise it to 7.6 per cent during the current fiscal.

The discussion was organised by the Indian Council for Research on International Economic Relations ICRIER.