GAAR Provisions: The Need for Internationally Accepted Restrictions on Application

Abstract

In this article, the authors examine the uncertainties created by, and the possible restrictions in the application of, India’s new general anti-avoidance rule (GAAR). They consider its interaction with income tax treaty benefits and the OECD’s multilateral instrument. The article canvasses the pre-GAAR approach adopted in Indian case law, reviews clarifications issued by the Central Board of Direct Taxation in 2017 and surveys jurisprudence in other common law jurisdictions as a source of guidance for Indian courts, which will need to interpret the new law.