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Press watch: India ‘delays tax avoidance laws’

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‘India will delay the introduction of wide-ranging proposed tax avoidance laws by one year, in a move designed to placate international investors worried over increasingly erratic legal changes.

‘In the latest in a series of delays and policy reversals, Pranab Mukherjee, the finance minister, confirmed in parliament that the introduction of the general anti-avoidance rules (GAAR) would be deferred until April 2013.

‘The rules are part of a wider package of changes in India’s March budget that caused widespread concerns among foreign businesses and sharply reduced capital flows at a time when Asia’s third-largest economy is already suffering from slowing growth and a widening current account deficit.

‘But Mr Mukherjee disappointed investors by ploughing ahead with plans to allow the retrospective taxation of certain international transactions, a move in part designed to recover more than $2bn of capital gains tax from UK-based telecoms group Vodafone.’

Financial Times, 7 May 2012