CBDT achieves important milestone of signing 200 APAs
The Central Board of Direct Taxes (CBDT) has crossed an important milestone of having signed 200 Advance Pricing Agreements (APAs). It was achieved after it entered into seven more APAs in February 2018.
All the seven were Unilateral APAs and pertain to pharmaceuticals, automobiles, financial and food & beverages sectors of the economy. With this, CBDT till has entered into 203 APAS (185 Unilateral and 18 Bilateral APAs).
The APAs signed so far covers international transactions in manufacturing, provision of software development services, provision of IT enabled Services (ITES), provision of contract R&D Services, payment of royalty, Distribution, provision of marketing support services, AMP expenses, provision of engineering design support services, provision of sourcing support services, payment of interest, etc.
Advance Pricing Agreement (APA) Scheme
The APA scheme endeavours to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and setting prices of international transactions in advance. Its provision was introduced in Income-tax Act, 1961 in 2012 and Rollback provisions were introduced in 2014.
The scheme aims to strengthen Government’s resolve of fostering non-adversarial tax regime. It has significantly contributed towards improving ease of doing business in India and has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.
Categories: Business, Economy & Banking