{"id":335391,"date":"2024-11-18T09:00:27","date_gmt":"2024-11-18T03:30:27","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=335391"},"modified":"2024-11-18T08:59:06","modified_gmt":"2024-11-18T03:29:06","slug":"gaar-v-taar-india-and-uk-experience","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/","title":{"rendered":"GAAR v. TAAR: India and UK Experience"},"content":{"rendered":"
\n

T<\/span>raditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused, much like a sniper targeting a specific objective. They are designed to close identifiable loopholes in tax laws being exploited to avoid taxes. Each TAAR focuses on particular avoidance schemes and is legally clear, ensuring predictability.1<\/sup><\/a> They have proven highly effective in addressing established tax avoidance strategies as is clear from BlackRock HoldCo 5, LLC<\/span> v. HMRC<\/span>2<\/sup><\/a>, Kwik-Fit<\/span> v. HMRC<\/span>3<\/sup><\/a> in the United Kingdom (UK) and Vikram Krishna<\/span> v. CIT<\/span>4<\/sup><\/a> and Gopal and Sons (HUF)<\/span> v. CIT<\/span>5<\/sup><\/a> in India.<\/p>\n

However, the specificity of TAARs limits their effectiveness against new and evolving tax avoidance schemes, as it is impractical to preemptively define every potential transaction. TAARs may not address schemes predating their enactment or those exploiting loopholes within the TAAR itself.6<\/sup><\/a> Also, their scope for corrective action is limited, as TAARs often lack the authority to reclassify, recharacterise, or disregard transactions to counteract avoidance effectively.7<\/sup><\/a><\/p>\n

This creates a cycle where taxpayers devise new strategies, prompting governments to introduce more TAARs, complicating the tax framework. In the UK, there are over 300 TAARs, including those in the UK Corporation Tax Act, 20098<\/sup><\/a>, and the UK Taxation of Chargeable Gains Act, 19929<\/sup><\/a>.10<\/sup><\/a> India faces similar complexities, with numerous TAARs under the Income Tax Act, 196111<\/sup><\/a> including Section 2(22)(e<\/span>)12<\/sup><\/a>, which addresses disguised profit distributions as loans; Section 4313<\/sup><\/a>, targeting manipulative transactions involving depreciable assets; and Sections 50-C14<\/sup><\/a> and 50-CA15<\/sup><\/a>, which ensure that capital gains on property and securities transfers reflect fair market value.<\/p>\n

Due to the abovementioned challenges, many countries including India and the UK have drifted into adopting the General Anti-Avoidance Rules or the GAAR, which are more akin to a shotgun approach, with broad, overarching provisions to tackle a wide range of tax avoidance arrangements. Despite this, TAARs remain in use, as GAARs are resource-intensive and often employed only as a last resort. This coexistence raises issues regarding conflict resolution and prioritisation between TAARs and GAARs, which can be seen in both India and in the UK.<\/p>\n

UK<\/h4>\n

The UK experience illustrates the risks of unclear guidance on applying GAAR versus TAAR. His Majesty’s Revenue and Customs (HMRC) for instance has invoked GAAR in three cases involving gold bullion payments to employees to avoid tax16<\/sup><\/a>, despite the UK Supreme Court’s ruling in RFC 2012 Plc (In Liquidation) (Formerly the Rangers Football Club Plc)<\/span> v. Advocate General for Scotland<\/span>17<\/sup><\/a> that such payments should be treated as earnings under Section 62 of the Income Tax (Earnings and Pensions) Act, 2003 (Itepa<\/span>)18<\/sup><\/a>. Ordinary tax laws could have addressed these cases, making GAAR unnecessary.<\/p>\n

This is troubling, as invoking GAAR in the UK triggers a severe 60% special penalty19<\/sup><\/a> and accelerated payment notices (APNs)20<\/sup><\/a>. The APNs are used to expedite tax collection in tax avoidance cases, potentially imposing an unfair burden on taxpayers. Even with pending appeals, taxpayers must pay the full disputed amount in such cases.<\/p>\n

The indiscriminate use of GAAR has been widely criticised. For instance, in Wired Orthodontics<\/span>21<\/sup><\/a>, where GAAR was discussed for the first time in the UK. The Court ruled that GAAR was unnecessary for the relevant fact situations because the schemes could be addressed adequately through general tax laws. UK courts have cautioned against overreliance on GAAR. The courts instead encourage the HMRC, His Majesty’s Revenue and Customs to apply TAAR wherever it applies and GAAR should be used sparingly as a last resort.<\/p>\n

India<\/h4>\n

On the other hand, the High Court decision this year22<\/sup><\/a> held that GAAR takes precedence over TAARs due to the non obstante clause in Section 95(1) of the Income Tax Act, 196123<\/sup><\/a>. This clause explicitly states that GAAR applies despite any conflicting provisions in the Act when an impermissible avoidance arrangement is identified. Moreover, Section 10024<\/sup><\/a> of the same chapter underscores that GAAR can be applied either in addition to, or as a replacement for, any existing tax determination methods, including TAAR.<\/p>\n

However, in this case, GAAR was applied neither in place of nor in addition to TAAR. The Court held that no TAAR covered the facts of the case. The closest TAAR was Section 94(8) of the Income Tax Act, 196125<\/sup><\/a> but it did not apply to the taxpayer’s situation. Since no TAAR was applicable, the Court proceeded to apply GAAR. It found the arrangement lacked commercial substance and satisfied both the tainted elements test and the main purpose test. Thus, the ratio of the case is that if no TAAR applies, GAAR can still be invoked for a given fact situation. The ruling is not a blanket endorsement of GAAR’s dominance over TAAR.<\/p>\n

The case does not address what happens when both GAAR and TAAR apply to a situation. It would likely be left to the tax authorities to decide, and they may favour TAAR in India, as it avoids GAAR’s cumbersome procedures, such as multiple permissions, monetary thresholds, and a GAAR panel.<\/p>\n

Notably, there is nothing in the Income Tax Act, 1961 that prevents applying TAAR over GAAR. While the GAAR’s non obstante clause seems to grant GAAR overriding effect, it does not apply indiscriminately.26<\/sup><\/a> When the statute’s language is clear, the non obstante clause cannot narrow its interpretation. Instead, it applies only to genuinely conflicting provisions.27<\/sup><\/a> Therefore, only in case of conflicts between GAAR and TAAR, GAAR takes precedence, but not automatically or in every case. If no conflict is there, TAAR may still be given precedence.<\/p>\n

Separately, some of the court’s arguments deserve closer examination. The Court claimed that GAAR should take precedence over TAAR because it was enacted later.28<\/sup><\/a> This is based on the maxim lex posterior derogat legi priori, which holds that a later law takes precedence over an earlier one.29<\/sup><\/a> However, this reasoning is flawed when applied to the context at hand. The mere chronological order of enactment should not be the deciding factor in determining the precedence here. For example, newly introduced TAARs should not be treated differently from pre-existing ones solely based on their date of enactment, nor should they automatically be considered subordinate to GAAR.<\/p>\n

The Court’s conclusion also appears to misinterpret precedents like R.S. Raghunath<\/span> v. State of Karnataka<\/span>30<\/sup><\/a>, Union of India<\/span> v. Shiv Dayal Soin & Sons (P) Ltd.<\/span>31<\/sup><\/a> and CTO<\/span> v. Binani Cements Ltd.<\/span>32<\/sup><\/a>, which centered on the principle of lex specialis derogat legi generali, meaning that specific law overrides general law. In the present case, the proper interpretation should have recognised that while both TAAR and GAAR have their distinct domains, GAAR prevails in cases of conflict due to its non obstante clause. This is based on the understanding that GAAR should not be seen as a general law and is actually drafted in a manner to give it a very special status in the Indian statute.<\/p>\n

In my view, the GAAR framework has been misunderstood, largely due to its nomenclature “General” Anti-Avoidance Rules in India and “General” Anti-Abuse Rules in the UK. These should not be perceived as general laws meant for indiscriminate use. Instead, GAARs are broadly framed to target only the most egregious forms of tax avoidance and should be applied selectively and sparingly. Harish Salve for instance warned not to implement GAAR like a fisherman’s net to catch whatever you can.33<\/sup><\/a><\/p>\n

GAARs unpredictable nature can create uncertainty, reinforcing the need for it to be used as a provision of last resort, while still having the authority to override other tax laws in case of conflict.34<\/sup><\/a> This has been reiterated in both the United Nations (UN) Practical Portfolio35<\/sup><\/a>, the International Monetary Fund (IMF) technical note36<\/sup><\/a> and the Inter-American Center of Tax Administrations (Iacta<\/span>)37<\/sup><\/a>. In jurisdictions like Australia, GAAR is a provision of last resort.38<\/sup><\/a><\/p>\n

Similarly, in R.<\/span> v. Canada Trustco Mortgage Co.<\/span>39<\/sup><\/a>, the Canadian Supreme Court affirmed GAAR’s role as a last resort. New Zealand courts have adopted a “tandem approach”, harmonising TAARs with GAAR. Under this approach, while both are significant and are given effect to, GAAR takes precedence in cases where the taxpayer has taken advantage of a loophole in the TAARs itself. In such cases the GAAR applies. This balance ensures that GAAR effectively addresses avoidance without undermining TAAR.40<\/sup><\/a> This interpretation also aligns with the Central Board of Direct Taxes (CBDT) Circular of India.41<\/sup><\/a><\/p>\n

TAAR and GAAR should be harmonised to ensure both are applied effectively. The rule of harmonious construction dictates that all laws be given full effect. In Ben Nevis Forestry Ventures Ltd.<\/span> v. IRC<\/span>42<\/sup><\/a>, it was held that TAAR and GAAR should be enforced comprehensively. In my view, TAAR should generally take precedence and be applied first, ensuring it is not rendered redundant. However, if an arrangement exploits TAAR loopholes and satisfies GAAR conditions, GAAR should be applied. The tax authorities should prioritise TAAR and only invoke GAAR when TAAR fails to address tax avoidance. This principle is supported by CBDT Circular and may be further clarified by statute.<\/p>\n<\/div>\n\n

*Indian Revenue Service Officer, LLM in International Tax Law from King’s College London. Author can be reached at: aastha.suman@kcl.ac.uk.<\/span><\/strong><\/p>\n

**Indian Railway Accounts Service Officer of 2016 batch, recently completed LLM in International Finance Law from King’s College London on the Chevening scholarship. He is a Graduate of NUJS, Kolkata, 2013 Batch.<\/span><\/strong><\/p>\n

1.<\/a> Nabil Orow, “The Proposed GAAR for Direct Taxes — An Australian Perspective”, (1999) 39(6) European Taxation 215.<\/p>\n

2.<\/a> 2024 EWCA Civ 330.<\/p>\n

3.<\/a> 2024 EWCA Civ 434.<\/p>\n

4.<\/a> 2019 SCC OnLine SC 2394.<\/a><\/p>\n

5.<\/a> (2017) 3 SCC 574.<\/a><\/p>\n

6.<\/a> Elizabeth Keeling, “Wide of the Mark? Are Targeted Anti-Avoidance Rules in UK Tax Legislation Doing Their Job?”, (2022) 43(2) Statute Law Review 153.<\/p>\n

7.<\/a> Antony Seely, Briefing Paper — Tax Avoidance: A General Anti-Abuse Rule, (2021) House of Commons Library 6265, 66.<\/p>\n

8.<\/a> Corporation Tax Act, 2009 (UK).<\/p>\n

9.<\/a> Taxation of Chargeable Gains Act, 1992 (UK).<\/p>\n

10.<\/a> Selina Keesoony, Tax Avoidance and the Law: Understanding the UK General Anti-Abuse Rule<\/span> (Routledge, 2022) p. 23.<\/p>\n

11.<\/a> Income Tax Act, 1961.<\/a><\/p>\n

12.<\/a> Income Tax Act, 1961, S. 2(22)(e).<\/a><\/p>\n

13.<\/a> Income Tax Act, 1961, S. 43.<\/a><\/p>\n

14.<\/a> Income Tax Act, 1961, S. 50-C.<\/a><\/p>\n

15.<\/a> Income Tax Act, 1961, S. 50-CA.<\/a><\/p>\n

16.<\/a> UK-Panel Opinion, “Employee Rewards Using Gold Bullion”, dated 10-11-2017, 9-11-2017 and 18-7-2017.<\/p>\n

17.<\/a> (2017) 1 WLR 2767 : 2017 UKSC 45.<\/a><\/p>\n

18.<\/a> Income Tax (Earnings and Pensions) Act, 2003, S. 62.<\/p>\n

19.<\/a> Finance Act, 2014, S. 212-A (UK).<\/p>\n

20.<\/a> Finance Act, 2014, Pt. 4, Ch. 3, S. 219 (UK).<\/p>\n

21.<\/a> CBDT, Clarifications on Implementation of GAAR Provisions under the IITA, Circular No. 7, 27-1-2017.<\/p>\n

22.<\/a> Ayodhya Rami Reddy<\/span> v. CIT<\/span>, 2024 SCC OnLine TS 985<\/a>.<\/p>\n

23.<\/a> Income Tax Act, 1961, S. 95(1).<\/a><\/p>\n

24.<\/a> Income Tax Act, 1961, S. 100.<\/a><\/p>\n

25.<\/a> Income Tax Act, 1961, S. 94(8).<\/a><\/p>\n

26.<\/a> DIT<\/span> v. Schlumberger Asia Services Ltd.<\/span>, 2019 SCC OnLine Utt 274<\/a>; Bank of India<\/span> v. CIT<\/span>, 2020 SCC OnLine ITAT 12140.<\/a><\/p>\n

27.<\/a> Pramod Kumar, “JAAR, GAAR and SAAR: Coexistence without Overlapping?” (taxsutra.com, 17-6-2024).<\/p>\n

28.<\/a> Ayodhya Rami Reddy<\/span> v. CIT<\/span>, 2024 SCC OnLine TS 985<\/a>, para 27.<\/p>\n

29.<\/a> Shefali Goradia and others, “Interplay of GAAR with Tax Treaties and its Impact” in Mukesh Butani and other (eds.), General Anti-Avoidance Rules: The Final Tax Frontier?<\/span> (1st Edn., Thomson Reuters, 2024) p. 442.<\/p>\n

30.<\/a> (1992) 1 SCC 335.<\/a><\/p>\n

31.<\/a> (2003) 4 SCC 695.<\/a><\/p>\n

32.<\/a> (2014) 8 SCC 319.<\/a><\/p>\n

33.<\/a> Harish N. Salve, “Perspectives on GAAR: A Dialogue with Harish N. Salve” in Mukesh Butani and other (eds.), General Anti-Avoidance Rules: The Final Tax Frontier?<\/span> (1st Edn., Thomson Reuters, 2024).<\/p>\n

34.<\/a> David Fernandes and Kerrie Sadiq, “A Principled Framework for Assessing General Anti-Avoidance Regimes”, (2016) 2 British Tax Review 172.<\/p>\n

35.<\/a> United Nations (UN) Practical Portfolio: Protecting the Tax Base of Developing Countries through the Use of General Anti-Avoidance Rules (financing.desa.un.org, 2019).<\/p>\n

36.<\/a> Christophe Waerzeggers and Cory Hillie, “Introducing a General Anti-Avoidance Rule (GAAR): Ensuring that a GAAR Achieves its Purpose”, IMF Technical Note 2016\/1.<\/p>\n

37.<\/a> Inter-American Center of Tax Administrations, “Toolkit for the Design and Effective Implementation of Domestic and International General Anti-Avoidance Rules” (ciat.org, 2022).<\/p>\n

38.<\/a> Michael Bersten, “GAAR: The Australian Story”, (2023) 5 British Tax Review 641-665.<\/p>\n

39.<\/a> 2005 SCC OnLine Can SC 53, para 21.<\/a><\/p>\n

40.<\/a> Craig Elliffe, “Designing a Powerful General Anti-Avoidance Rule: Reflections on the New Zealand Experience”, (2023) 5 British Tax Review 704.<\/p>\n

41.<\/a> CBDT, Clarifications on Implementation of GAAR Provisions under the IITA, Circular No. 7, 27-1-2017.<\/p>\n

42.<\/a> 2008 NZSC 6.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Aastha Suman* and Ishaan Sharma**<\/p>\n","protected":false},"author":8808,"featured_media":335424,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[42503,1191],"tags":[75336,45195,35486,75332,75334,75333,75337,75335],"class_list":["post-335391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-analysis","category-op-ed","tag-chargeable-gains-act","tag-gaar","tag-general-anti-avoidance-rules","tag-india-and-uk-experience","tag-taars","tag-targeted-anti-avoidance-rules","tag-uk-corporation-tax-act","tag-uk-taxation"],"yoast_head":"\nGAAR v. TAAR: India and UK Experience | SCC Times<\/title>\n<meta name=\"description\" content=\"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GAAR v. TAAR: India and UK Experience\" \/>\n<meta property=\"og:description\" content=\"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/\" \/>\n<meta property=\"og:site_name\" content=\"SCC Times\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/scc.online\/\" \/>\n<meta property=\"article:published_time\" content=\"2024-11-18T03:30:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"886\" \/>\n\t<meta property=\"og:image:height\" content=\"590\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Bhumika Indulia\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"GAAR v. TAAR: India and UK Experience\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bhumika Indulia\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/\",\"url\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/\",\"name\":\"GAAR v. TAAR: India and UK Experience | SCC Times\",\"isPartOf\":{\"@id\":\"https:\/\/www.scconline.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp\",\"datePublished\":\"2024-11-18T03:30:27+00:00\",\"author\":{\"@id\":\"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/919ec47cc1b871b362af05740398033a\"},\"description\":\"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused\",\"breadcrumb\":{\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage\",\"url\":\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp\",\"contentUrl\":\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp\",\"width\":886,\"height\":590,\"caption\":\"India and UK Experience\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.scconline.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"GAAR v. TAAR: India and UK Experience\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.scconline.com\/blog\/#website\",\"url\":\"https:\/\/www.scconline.com\/blog\/\",\"name\":\"SCC Times\",\"description\":\"Bringing you the Best Analytical Legal News\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.scconline.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/919ec47cc1b871b362af05740398033a\",\"name\":\"Bhumika Indulia\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/04\/Me-150x150.jpg\",\"contentUrl\":\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/04\/Me-150x150.jpg\",\"caption\":\"Bhumika Indulia\"},\"url\":\"https:\/\/www.scconline.com\/blog\/post\/author\/editor_1\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"GAAR v. TAAR: India and UK Experience | SCC Times","description":"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/","og_locale":"en_US","og_type":"article","og_title":"GAAR v. TAAR: India and UK Experience","og_description":"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused","og_url":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/","og_site_name":"SCC Times","article_publisher":"https:\/\/www.facebook.com\/scc.online\/","article_published_time":"2024-11-18T03:30:27+00:00","og_image":[{"width":886,"height":590,"url":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.jpeg","type":"image\/jpeg"}],"author":"Bhumika Indulia","twitter_card":"summary_large_image","twitter_title":"GAAR v. TAAR: India and UK Experience","twitter_misc":{"Written by":"Bhumika Indulia","Est. reading time":"10 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/","url":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/","name":"GAAR v. TAAR: India and UK Experience | SCC Times","isPartOf":{"@id":"https:\/\/www.scconline.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage"},"image":{"@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage"},"thumbnailUrl":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp","datePublished":"2024-11-18T03:30:27+00:00","author":{"@id":"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/919ec47cc1b871b362af05740398033a"},"description":"Traditionally, tax avoidance was tackled through Targeted Anti-Avoidance Rules or TAARs. TAARs are precise and narrowly focused","breadcrumb":{"@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#primaryimage","url":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp","contentUrl":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp","width":886,"height":590,"caption":"India and UK Experience"},{"@type":"BreadcrumbList","@id":"https:\/\/www.scconline.com\/blog\/post\/2024\/11\/18\/gaar-v-taar-india-and-uk-experience\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.scconline.com\/blog\/"},{"@type":"ListItem","position":2,"name":"GAAR v. TAAR: India and UK Experience"}]},{"@type":"WebSite","@id":"https:\/\/www.scconline.com\/blog\/#website","url":"https:\/\/www.scconline.com\/blog\/","name":"SCC Times","description":"Bringing you the Best Analytical Legal News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.scconline.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/919ec47cc1b871b362af05740398033a","name":"Bhumika Indulia","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.scconline.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/04\/Me-150x150.jpg","contentUrl":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/04\/Me-150x150.jpg","caption":"Bhumika Indulia"},"url":"https:\/\/www.scconline.com\/blog\/post\/author\/editor_1\/"}]}},"jetpack_featured_media_url":"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/11\/Selected-photo-5.webp","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":380009,"url":"https:\/\/www.scconline.com\/blog\/post\/2026\/04\/02\/cbdt-notified-income-tax-amendment-rules-2026\/","url_meta":{"origin":335391,"position":0},"title":"CBDT Notifies GAAR Clarifications Under Income-tax (Amendment) Rules, 2026","author":"Shubhi","date":"April 2, 2026","format":false,"excerpt":"Finance Ministry has notified the Income-tax (Amendment) Rules, 2026, clarifying GAAR exclusion for pre-April 2017 investments.","rel":"","context":"In "Legislation Updates"","block_context":{"text":"Legislation Updates","link":"https:\/\/www.scconline.com\/blog\/post\/category\/legislationupdates\/"},"img":{"alt_text":"Income-tax (Amendment) Rules","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/04\/Income-tax-Amendment-Rules.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/04\/Income-tax-Amendment-Rules.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/04\/Income-tax-Amendment-Rules.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2026\/04\/Income-tax-Amendment-Rules.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":102461,"url":"https:\/\/www.scconline.com\/blog\/post\/2017\/01\/30\/clarifications-on-implementation-of-gaar-provisions-under-income-tax-act-1961\/","url_meta":{"origin":335391,"position":1},"title":"Clarifications on implementation of GAAR provisions under Income Tax Act, 1961","author":"Saba","date":"January 30, 2017","format":false,"excerpt":"The\u00a0General Anti Avoidance Rule (GAAR)\u00a0provisions shall be effective from the Assessment Year 2018-19 onwards, i.e. Financial Year 2017-18 onwards.\u00a0 The necessary procedures for application of GAAR and conditions under which it shall not apply, have been enumerated in Rules 10U to 10UC of the Income Tax Rules, 1962. The provisions\u2026","rel":"","context":"In "Legislation Updates"","block_context":{"text":"Legislation Updates","link":"https:\/\/www.scconline.com\/blog\/post\/category\/legislationupdates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":243930,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/02\/16\/revisiting-general-anti-avoidance-rules-in-income-tax-law\/","url_meta":{"origin":335391,"position":2},"title":"Revisiting General Anti-Avoidance Rules in Income Tax Law","author":"Bhumika Indulia","date":"February 16, 2021","format":false,"excerpt":"by Tarun Jain\u2020 Cite as: 2021 SCC OnLine Blog Exp 9","rel":"","context":"In "Experts Corner"","block_context":{"text":"Experts Corner","link":"https:\/\/www.scconline.com\/blog\/post\/category\/experts_corner\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/tax_4.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/tax_4.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/tax_4.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/tax_4.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/tax_4.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":284774,"url":"https:\/\/www.scconline.com\/blog\/post\/2023\/03\/06\/critical-analysis-of-gaar-in-light-of-the-constitution-of-india-and-dtaa\/","url_meta":{"origin":335391,"position":3},"title":"Critical Analysis of GAAR in Light of the Constitution of India and DTAA","author":"Bhumika Indulia","date":"March 6, 2023","format":false,"excerpt":"by Bhola Shankar\u2020","rel":"","context":"In "Op Eds"","block_context":{"text":"Op Eds","link":"https:\/\/www.scconline.com\/blog\/post\/category\/op-ed\/legal-analysis\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/03\/MicrosoftTeams-image-638.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/03\/MicrosoftTeams-image-638.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/03\/MicrosoftTeams-image-638.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2023\/03\/MicrosoftTeams-image-638.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":324480,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/06\/15\/colourable-devices-cannot-be-part-of-tax-planning-telhc\/","url_meta":{"origin":335391,"position":4},"title":"Colourable devices cannot be part of tax planning; obligation of every citizen to pay taxes honestly: Telangana HC","author":"Simranjeet","date":"June 15, 2024","format":false,"excerpt":"The Court stated that due to the non-obstante clause in Chapter X-A i.e., the General Anti-Avoidance Rules (\u2018GAAR\u2019), its provisions get an overriding effect over and above the other existing provisions of law.","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Telangana High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Telangana-High-Court.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Telangana-High-Court.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Telangana-High-Court.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/02\/Telangana-High-Court.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":214815,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/05\/17\/reporting-requirements-under-clauses-30-c-and-44-of-tax-audit-report-to-be-kept-in-abeyance-till-31-03-2019\/","url_meta":{"origin":335391,"position":5},"title":"Reporting requirements under Clauses 30-C and 44 of Tax Audit Report to be kept in abeyance till 31-03-2019","author":"Bhumika Indulia","date":"May 17, 2019","format":false,"excerpt":"Order under Section 119 of the Income-Tax Act, 1961 Section 44 AB of the Income-Tax Act, 1961 ('the Act') read with Rule 6G of the Income-tax Rules, 1962 ('the Rules') requires specified persons to furnish the Tax Audit Report along with the prescribed particulars in Form No. 3CD. The existing\u2026","rel":"","context":"In "Legislation Updates"","block_context":{"text":"Legislation Updates","link":"https:\/\/www.scconline.com\/blog\/post\/category\/legislationupdates\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/335391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=335391"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/335391\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/335424"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=335391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=335391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=335391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}