Knowledge Center

  • Specified Domestic Transaction (SDT) to be reported in revised form 3CEB

    June 14 2013

    By virtue of Finance Act, 2012 transfer pricing provisions as applicable to international transactions, were also made applicable to certain specified domestic transactions (SDT). The provision was enacted with a view to have a safeguard against the tax arbritages claimed by persons enjoying tax holidays, differential tax rates, presence of accumulated losses etc by providing a more technical and focused concept of Arms' length price (ALP) for transactions between related parties.

    Such Specified Domestic Transactions are to be reported in Part C of the revised form 3CEB, a combined form for both international transaction and domestic transaction. It is interesting to note here that the erstwhile requirement of reporting the transactions with related parties in form 3CD will continue. Reporting in form 3CEB, if applicable will be an extra compliance burden on the part of the assessee.

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  • Foreign investment in India by SEBI registered Long term investors in Government dated Securities

    June 13 2013

    The limit for foreign investment in India by SEBI registered Long Term investors in Government dated Securities has now been increased by USD 5 billion to USD 30 billion.
    The enhanced limit of USD 5 billion will be available only for investments in Government dated securities by long term investors registered with SEBI – Sovereign Wealth Funds (SWFs), Multilateral Agencies, Pension/ Insurance/ Endowment Funds, Foreign Central Banks.

    [Source: RBI/2012-13/530 A.P. (DIR Series) Circular No.111 dated. June 12, 2013]

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  • Guidance to Advance Pricing Agreement (APA) with FAQs

    May 30 2013

    Off late, the increase in the number of litigation in transfer pricing arena,  both domestically as well as globally, has been quite astonishing. To bring about a certainty & uniformity in    the application of transfer pricing provisions and determination of arm's length price in India, Government of India vide Finance Act, 2012 brought about a new provision/concept of Advance Pricing Agreement (APA) for international transactions. The rules for implementing this new APA program were issued on 30th August, 2012.

    Now to increase awareness of the taxpayers about the  new APA program and its implementation, the CBDT has released a booklet called the APA Guidance Booklet with FAQs (APA Guidance). The APA Guidance deals with the procedure to be followed by a taxpayer and the tax authorities before a taxpayer can enter into an APA. The FAQs section in the APA Guidance provides clarifications on certain general issues raised by the taxpayers with regard to the APA process, disclosure requirements in the application, critical assumptions, detailed functions performed, assets employed and risks assumed (FAR) analysis, conversion of a unilateral APA to a bilateral/multilateral APA, amendment/renewal/withdrawal of an APA, profit attribution to Permanent Establishments (PE) and the impact of an APA on the actions of the Assessing Officer/Transfer Pricing Officer. The FAQs section of the Guidance also provides clarifications on the procedural and documentary  information required to be provided to the APA authorities.

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  • Redefining of FII & FDI!!

    April 25 2013

    After a mere consolidated FDI policy, RBI plans to come out with a discussion paper to redefine FII & FDI.


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  • Revised Tolerance band for International as well as Domestic Transfer Pricing for AY 2013-14

    April 25 2013

    Govt of India has come out with out a notification to revise the tolerance band for international as well as specified domestic transaction under transfer pricing regulations. The revised tolerance band stands to 1% for wholesale traders & 3% for all other categories/cases. The revised tolerance band is applicable for AY 2013-14.

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  • India-Mauritius DTAA will it be renegotiated ever??

    April 23 2013

    Finance Minister P Chidambaram has made a statement that the tax treaty with Mauritius is back to the drawing board.

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