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India enters into 20 advance pricing agreements with country's taxpayers

The statement also revealed that the 20 agreements involved taxpayers from various sectors such as Information Technology, Banking and finance, and Insurance among others. Photograph: (Reuters)

WION New Delhi, Delhi, India Aug 30, 2016, 01.08 PM (IST)
India's Central Board of Direct Taxes (CBDT) has entered into 20 unilateral advance pricing agreements (APAs) with Indian taxpayers on Monday and Tuesday.

The APA scheme, launched under the Income-tax Act in 2012, allows the tax payers to use a pre-decided method of caculating the transfer price for overseas transactions. It also lets them decide the arms-length price to avoid dispute between taxpayer and taxregulator.

This method and price can be used for a maximum period of five years.

"CBDT entered into 20 unilateral advance pricing agreements... (on) August 29, 2016 and August 30, 2016, with Indian taxpayers. Many of these agreements also have a 'Rollback' provision in them," the Finance Ministry said in a statement.

"Further, the taxpayer has the option to rollback the APA for four preceding years," it added.

The statement also revealed that the 20 agreements involved taxpayers from various sectors such as Information Technology, Banking and finance, and Insurance among others.

The Central Board of Direct Taxes has signed as many as 98 agreements including these 20 and expects more agreements in the near future.

"A total of 33 unilateral APAs and 1 bilateral APA have already been concluded in five months of the current Financial Year as against 55 in FY 2015-16," the statement added.

The statement also emphasised that this scheme has attracted various Multi National Enterprises (MNEs) which has led to filing of more than 700 applications over last four years.

(WION with inputs from PTI)
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