THE CBDT has
entered into 9 Advance Pricing Agreements (APAs) during the last two days
of the current financial year. All the 9 Agreements entered into are Unilateral
APAs. With this, the total number of APAs entered into by the CBDT has reached 152. This
includes 11 Bilateral APAs and 141 Unilateral APAs. In
financial year 2016-17, a total of 88 APAs (8 Bilateral APAs
and 80 Unilateral APAs) were entered into. The APAs signed in financial year
2016-17 include Agreements with some technological behemoths having major operations
in India in the IT sector.
The 9 APAs entered
into during the last two days of the current financial year pertain to various
sectors of the economy like Information Technology, Aviation, Oil & Gas, Automobiles, Electricals & Electronics,
etc. The international transactions covered in these agreements include Receipt
of Intra-Group Services, Provision of IT Enabled Services, Provision of Software
Development Services, Provision of Engineering Design Services, Provision
of Marketing Support Services, Import of Traded Goods, Payment of Interest
on ECB, Receipt of Interest, Receipt of Guarantee Fee, Receipt of License
Fee, Export of Goods, Receipt of Technical Support Services, Provision of
Business Support Services, etc.
The APA Scheme
was introduced in the Income-tax Act in 2012 and the “Rollback” provisions
were introduced in 2014. The scheme endeavours to provide certainty to taxpayers
in the domain of transfer pricing by specifying the methods of pricing and
setting the prices of international transactions in advance. Since its inception,
the APA scheme has been well-accepted by taxpayers and that has resulted
in more than 800 applications (both Unilateral and Bilateral) being filed
so far in five years.
The
signing of 88 APAs in a single year (F.Y 2016-17) is a significant achievement
of the CBDT and its Officers. The progress of the APA Scheme strengthens the
Government's resolve of fostering a non-adversarial tax regime. The Indian
APA programme has been appreciated nationally and internationally for being
able to address complex transfer pricing issues in a fair and transparent
manner.
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