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NEW DELHI: The Prime Minister's Office (PMO) appeared to distance itself from draft guidelines issued by the finance ministry on tax avoidance rules, clarifying that the draft regulations had not been "seen" by the prime minister and would be finalised after taking into account feedback from stakeholders.

Finance ministry officials, many of whom were appointed by Pranab Mukherjee, former finance minister and the ruling UPA's presidential candidate, were at a loss to explain the turn of events, barely hours after the ministry had released draft guidelines on the General Anti-Avoidance Rules (GAAR) late Thursday night. "Don't read too much into the release by the PMO. The PM has not applied his mind (on GAAR rules)," Finance Secretary RS Gujral was quoted as saying by news agency PTI when asked about the release issued by the PMO. The episode also seemed to confirm what has been widely suspected, a deep divide in thinking between the PMO and top officials at North Block.

The unusual statement from the Prime Minister's Office said the finance ministry release was merely 'draft guidelines' to seek 'wide-ranging feedback and for discussion purposes', suggesting the possibility of a rethink on the controversial rules that seek to deny tax benefit to any arrangement entered into with the sole purpose of avoiding tax. "These have not been seen by the prime minister and will be finalised with the approval of the prime minister, who holds the finance portfolio, only after considering the feedback received," said the PMO release.

A PMO official said the PM's office was not disowning the draft guidelines, but wanted to make it clear that these were not the final norms.

Finance ministry officials said on condition of anonymity that the preparation of the draft guidelines was accelerated at the insistence of the PMO. The original plan was to issue the guidelines about three weeks later after more consultations.

But senior PMO officials contradicted this version of events, saying neither the prime minister nor his office had given any such directive.

The PM had only broadly discussed issues and challenges that the economy faced and the need to win back investor confidence. Although tax issues were also addressed, the prime minister had not issued a specific directive or called for a complete reversal. "He had only asked for wider consultations and consideration on the tax issues at this point," the source in the know said.

Prime Minister Manmohan Singh's remarks on Wednesday referred to tax issues as a serious concern, appearing to confirm the speculation that GAAR and the retrospective amendments to the income-tax law proposed in the budget did not have his blessings. "There have been many factors that have contributed to this general negative mood. There are problems on the tax front which need to be addressed," he had said.

The government had delayed the introduction of GAAR by a year to April 1, 2013, after adverse reaction from overseas investors and stock markets.

The rules, if implemented, could result in investments routed through Mauritius, with which India has a tax avoidance treaty, being subjected to tax in India.

"These are draft guidelines and we are open to any change to do away an ''unintended consequence' seen from the rules," Gujral told ET.

The finance ministry has called stakeholders for consultations on July 9.

BJP also said that the review of the decisions taken by outgoing finance minister Pranab Mukherjee indicates that either he did not listen to Prime Minister Manmohan Singh or Singh did not have idea that these decisions were having the desired effect on economy.

"Now soon after assuming charge of Finance, the Prime Minister has started review of the decisions taken by finance minister. PMO has given such indications that there is a need for changes in the present policy. Not even 24 hours have passed that the finance minister left his chair, the chair is still hot, he (Singh) has started review and changes," BJP leader Murli Manohar Joshi said.

He demanded that the Prime Minister should spell out clearly the policy he intends to pursue for recovery of the country's economy and BJP will then decide on how to support.

Joshi, however, said that BJP was not an "obstructionist" and would offer constructive support to the government once the policies are spelt out clearly.

"We demand that the PM should come out quickly with a road-map or else we will be forced to think that the PM was not happy and was dissatisfied with the policies of the Finance Minister. That is why he was made a Presidential candidate... He was not listening to him and that is why this has been found a way to ease him out of the Cabinet. There are a lot of doubts and questions in the minds of the people," Joshi said.

On General Anti-Avoidance Rules (GAAR), he said the party was opposed to bringing it with retrospective effect. "We had opposed it in Parliament...Why did you not think then and why now?" he wondered.