The Central Board of Direct Taxes (CBDT) has signed 14 unilateral advance pricing agreements (APAs) with Indian taxpayers in March as it looks to reduce litigation by providing certainty in transfer pricing.
Besides, it has signed two bilateral APAs with the US during the month, a CBDT statement said.
"With the signing of these agreements, the total number of APAs entered into by CBDT has gone up to 219. This includes 199 unilateral APAs and 20 bilateral APAs," it said.
A total of 67 APAs (9 bilateral and 58 unilateral) have been signed in 2017-18.
The 16 APAs during March pertain to sectors like telecom, IT, automobile, pharmaceutical, beverage, banking and insurance.
The international transactions covered in these agreements include payment of royalty fee, provisions of business support services, marketing support services, engineering design services, engineering support services, among others.
While unilateral pacts involve only the taxpayer and the tax authority of the country where the taxpayer is located, bilateral agreements involve the taxpayer, associated enterprise of the taxpayer in the foreign country, the tax authority of the country where the taxpayer is located and the foreign tax authority.
The progress of the APA scheme strengthens the government's resolve of fostering a non-adversarial tax regime, the statement added.
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.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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