CBDT inks 10 more Advance Pricing Agreements
The Central Board of Direct Taxes (CBDT) has entered into 10 more Advance Pricing Agreements (APAs) pertaining to various sectors of economy like Telecom, Banking & Finance, Pharmaceutical, Steel, Retail and IT etc
It includes 7 Unilateral APAs, 2 Bilateral APAs with the United Kingdom and Japan. Seven of these Agreements have Rollback provisions in them.
With this, the total number of APAs entered into by the CBDT has reached 140. It includes 130 Unilateral APAs and 10 Bilateral APAs. In current FY 2016-17, 76 APAs (61 Unilateral and 7 Bilateral APAs) were signed.
About Advance Pricing Agreements (APAs) scheme
- The Union Government had introduced the APA Scheme in the Income-tax Act in 2012 and the “Rollback” provisions were introduced to it in 2014.
- The scheme endeavours to provide certainty to taxpayers in domain of transfer pricing issues by specifying the methods of pricing and setting the prices of international transactions in advance.
- The progress of APA Scheme appreciated nationally and internationally strengthens Government’s resolve of fostering a non-adversarial tax regime in a fair and transparent manner.
Transfer pricing: It is referred to the fixing of the price for goods and services sold in transactions between related legal subsidiaries (entities of a big company) based in different countries within an enterprise. It affects cash flow, investment decisions and performance indicators from a multinational company point of view. It affects the amounts paid as corporate tax to the Government.
Categories: India Current Affairs 2017