FM Mukherjee: Will examine and modify GAAR if required

Amidst fears that FIIs may be taxed for short-term capital gains in stock markets, the government on Tuesday said it will examine and modify the General Anti Avoidance Rules (GAAR) if required.

"I will examine and modify GAAR as and when required. This is essential for anti-avoidance," Mukherjee said in Parliament Tuesday.

In his budget for 2012-13, Finance Minister Pranab Mukherjee had said that the government wanted to introduce GAAR in order to "counter aggressive tax avoidance schemes, while ensuring that it is used only in appropriate cases, by enabling a review by a GAAR panel".

Securities and Exchange Board of India (SEBI) Chairman U K Sinha had said yesterday the government "is going to have a new look at tax avoidance, so they they are going to work in that way".

The fear of GAAR had spooked stock markets which tanked 2 percent yesterday on concerns that all short-term capital gains made by FII and P-Note investments would be taxed. The Sensex, however, recovered today rising over 200 points.

Meanwhile, Finance Ministry sources seeking to allay fears that Participatory Notes -- an instrument through which FIIs unregistered with Sebi invest in stock markets - said that the I-T department will have to first prove the intention of avoidance before making GAAR applicable.

"GAAR is not created to target any class of financial instruments. The onus of proving tax avoidance lies mainly with the government and partially on the assessee," sources said.

"All benefits which a person is entitled in a DTAA (Double Taxation Avoidance Agreement) treaty can be overruled or denied if GAAR is invoked," sources said.

Provisions of GAAR will be applicable from April 1 and not with retrospective effect.

Parliament censures Team Anna

 Lok Sabha on Tuesday condemned Team Anna for "lowering the dignity" of Parliament after a resolution was moved over which members cutting across party line slammed the activists for using derogatory language against MPs.

"Any remark lowering the dignity and esteem of this august House is unwarranted and totally unacceptable," Speaker Meira Kumar said summing up the sense of the House, after a brief discussion.

She said members of the House undergo rigorous scrutiny by the Election Commission under the provisions of Representation of People Act, Model Code of Conduct and other legal requirements while filing their nomination for election.

"After meticulously assessing their conduct and performance, the people of India, in their wisdom, elect them. The Parliament, therefore, reflects the collective will of the people of our country," the Speaker said.

Led by JD-U leader Sharad Yadav, members from all political hues came together in Lok Sabha to attack Team Anna for using derogatory language against parliamentarians. Some of them even said that those who levelled attack against the temple of democracy should be summoned in the House to punish them.

Moving a resolution against the civil society members, Yadav said the Speaker should take suo motu action against them for their utterances against democratic institutions.

Describing Parliament as a "supreme institution", SP leader Mulayam Singh Yadav said those civil society members who challenged its authority should be "summoned and taken to task". He requested consensus among members on the issue.

Speaking in the Lok Sabha today JD(U) president Sharad Yadav said that, “ People have seen what has been happening and what Team Anna has been speaking. I am worried that if the Parliament is not respected then where will the country go?

“A trend has started in the country to denigrate the politicians. Yes, the public has a right to be angry at us. But there should be a limit to it,” he added.

Directly attacking Team Anna, the JD(U) said that a kind of pessimism is being spread in the country in the wrong manner. Nonetheless, he accepted that fight against corruption should go on but in the right manner.

He also accepted that no everyone is of high morals in the Parliament. “There have been people in this House who have not been deserving of the place.” “But to disrespect the temple of democracy is not the right thing to do,” Sharad Yadav added.

“I do not object to the attack by Team Anna at us but no one should attack the institution of democracy,” he told the House.

The alleged inflammatory remarks made by Team Anna led to a huge uproar in both the Houses of Parliament on Monday and finally led to their adjournment.

Reacting to these allegations, Leader of Opposition in Lok Sabha Sushma Swaraj had said, “Team Anna has lost its focus, crossed all limits."

Swaraj, whose party had supported Anna Hazare's call for the Lokpal Bill, even advised Team Anna to maintain its integrity.

Congress MP Sanjay Nirupam had also endorsed the views expressed by Swaraj and Yadav and said, “Team Anna members call themselves the representatives of civil society but they have themselves used unparliamentary language. They have conducted themselves in a highly irresponsible and uncivilized manner."

Team Anna landed in a fresh controversy after key team members including Arvind Kejriwal, Kiran Bedi and others made derogatory remarks against the Parliamentarians during Anna Hazare’s day-long fast at New Delhi’s Jantar Mantar on Sunday.

Anna Hazare, while addressing his supporters, also warned that the government should be prepared to be voted out of power in 2014 if it does not pass the Lokpal Bill, which provides for a national anti-corruption agency.

Will Parliament censure Team Anna?

Team Anna, which had lost support of opposition parties for making derogatory remarks against the parliamentarians, might face a censure motion for denigrating the constitutional supremacy of Parliament and putting the politicians in a bad light.

Reports, Today, claimed that a Censure Motion could be moved by Lok Sabha Speaker Meira Kumar against Team Anna as demanded by the opposition BJP and JD(U).

Opposition MPs from BJP and the JD(U) yesterday demanded a Parliamentary resolution against Team Anna to condemn the uncivilized language used by them against the parliamentarians, saying that they have deviated from the fight against corruption.

The political parties including BJP, JD(U), SP and others yesterday warned the civil society members to refrain from making such defamatory remarks against the Parliamentarians who are the most vital part of the institution of democracy and termed the statements as unfortunate.

The alleged inflammatory remarks made by Team Anna led to a huge uproar in both the Houses of Parliament and finally led to their adjournment yesterday.

Reacting to these allegations, Leader of Opposition in Lok Sabha Sushma Swaraj said, “Team Anna has lost its focus, crossed all limits."

Swaraj, whose party had supported Anna Hazare's call for the Lokpal Bill, even advised Team Anna to maintain its integrity.

On his turn, Janta Dal (U) chief Sharad Yadav termed Team Anna’s allegation as an attack on the institution of Parliament. He criticized them for referring to politicians as murderers.

Congress MP Sanjay Nirupam also endorsed the views expressed by Swaraj and Yadav and said, “Team Anna members call themselves the representatives of civil society but they have themselves used unparliamentary language. They have conducted themselves in a highly irresponsible and uncivilized manner."

Team Anna landed in a fresh controversy after key team members including Arvind Kejriwal, Kiran Bedi and others made derogatory remarks against the Parliamentarians during Anna Hazare’s day-long fast at New Delhi’s Jantar Mantar on Sunday.

Anna Hazare, while addressing his supporters, also warned that the government should be prepared to be voted out of power in 2014 if it does not pass the Lokpal bill, which provides for a national anti-corruption agency.

Lokpal Bill in Lok Sabha today

The much-awaited Lokpal Bill will be introduced in the Lok Sabha on Today and the anti-graft legislation will be discussed during Parliament's extended session on December 27.

Although, the bill has solid backing of UPA chairperson and Congress president Sonia Gandhi, threat of a fast by noted social worker Anna Hazare also looms large on it.

The session, originally scheduled to end on December 22, will now reconvene on December 27-29 to discuss the bill.

However, the Samajwadi Party and the Rashtriya Janata Dal, two parties supporting the ruling UPA from outside, have struck a discordant note, saying the bill would make the local police very powerful.

Meanwhile, Anna, who has already threatened to go on a three-day fast, has rejected the bill as a betrayal of the people and said the legislation would not provide for a strong anti-graft institution.

"People will teach a lesson to this government one day," Anna said yesterday in his Ralegan-Siddhi village in Maharashtra.

He wondered how the proposed bill could be described as strong when the Central Bureau of Investigation (CBI) was being kept outside the ombudsman's ambit.

Taking on Anna, United Progressive Alliance chairperson Sonia Gandhi also said that there was a "deliberate and malicious misinformation" campaign that the Congress was not tackling corruption.

She listed bills on protection of whistleblowers, enhancing judicial accountability, the citizens right to grievance redressal, and the Lokpal bill which will be taken up for discussion from December 27-29.

Stating "she was ready to fight for the anti-graft Lokpal and women's reservation bills in the Lok Sabha" Gandhi dismissed as "rumours" that there were differences between the government and the ruling party.

She urged Congress MPs to be prepared for the battle in the house.

Describing the Lokpal bill as a "pathbreaking" legislation, the UPA chairperson urged the opposition parties and anti-corruption activist Hazare to accept it.

"They must accept it. I am always ready for a fight," said Gandhi.

The government draft bill brings the Prime Minister under Lokpal but leaves out two other key demands of the activist for inclusion of the CBI and the lower bureaucracy.

Interestingly, while MoS Narayanasamy said the "only opposition to the bill was from Anna" both Samajwadi Party and Rashtriya Janata Dal opposed the legislation.

RJD chief Lalu Prasad joined SP chief Mulayam Singh Yadav in saying there should be "consensus" before the bill is brought to Parliament and a decision on such a major issue could not be taken without giving it a thought. The SP has 22 MPs while the RJD has four MPs.

However, the main opposition Bharatiya Janata Party (BJP) said it will not comment on the bill until the final draft is circulated among MPs.

The remark came a day after several BJP leaders said they will protest the bill and called it "cheating the people."

"Even a full stop or a comma changes the meaning of a sentence... we will see the bill and only then give any comment," BJP leader SS Ahluwalia said.

The BJP said it wants the dissent note on the bill, given by its members who were on the Parliamentary Standing Committee, included.

Earlier in the day, senior BJP leader LK Advani along with Leader of Opposition in the Lok Sabha Sushma Swaraj and her Rajya Sabha counterpart Arun Jaitley met Finance Minister Pranab Mukherjee to discuss the bill.