Arshu John and Linesh Lalwani write a detailed analysis of the General Anti-Avoidance Rule from an Indian as well as International perspective.

Abstract

Internationally, tax avoidance has been recognized as an
area of concern and several countries have expressed
concern over tax evasion and avoidance. This is also
evident from the fact that either nations are legislating the
doctrine of General Anti-Avoidance Regulations in their tax
code or strengthening their existing code. In India, the
proposed Direct Tax Code seeks to address the issues
relating to tax avoidance and evasion by bringing in
General Anti-Avoidance Rules (GAAR). This paper firstly
lays down the essential features of the proposed GAAR
provisions. It gives a brief history as to the introduction of
GAAR in India which is necessary because the introduction
of such a provision is an important step for a fast growing
economy of a developing country such as India. Recently,
the implementation of GAAR was deferred yet again which
only points to the magnitude of the implications of such a
step. It is the opinion of the authors that despite such
deferment, the issue of GAAR is nonetheless very relevant,
and one that deserves discussion. The paper has for this
reason covered the entire debate that surrounds the
implementation of GAAR. The potential concerns that arise
from it, the advantages that would be borne from it, and the
alternatives to GAAR which could allow the exploitation of
such advantages without the risk of these concerns. The
paper also compares the proposed GAAR of the Direct Tax
Code with provisions of GAAR established in five other
countries, namely, United Kingdom, United States of
America, South Africa, Canada and Australia and how
these GAAR provisions have shaped and influences the
Indian GAAR provisions. Lastly, the paper also explores the effect it will have on international law and treaty
obligations. In conclusion, the authors submit that GAAR
presents itself as the necessary solution to check tax evasion
and tax avoidance.