India: Advance Pricing Agreement (”APA”) Statistics

published on 14 November 2018

Central Board of Direct Taxes (”CBDT”) achieves another milestone by resulting in additional income of about INR 10,000 crores through APA Programme.

CBDT has published its second Annual Report (FY 2017-18) in the month of August 2018. Accordingly, the Indian APA programme has been appreciated nationally and internationally as complex transfer pricing issues which were prone to long drawn litigation are being increasingly resolved through APAs. CBDT Annual Report states that even though revenue collection is not primary objective of the Indian APA Programme, it is estimated that 219 signed APAs have resulted in additional income of about INR 10,000 crores and it resulted in tax payment of INR 3,000 crores without getting into litigation or there being any dispute.

Amendments in clauses of Tax Audit Report (Form 3CD) relating to Transfer Pricing Provisions CBDT issued amendments in the tax audit report vide notification no. 33 dated July 20, 2018. These amendments shall come into force from August 20, 2018.

1. Clause 30A form 3CD: Secondary adjustment

• Details of the clause under which the primary adjustment is made;
• Amount of primary adjustment;
• Whether excess money is repatriable and if yes, within prescribed time (i.e. 90 days);
• If it is not repatriated, then amount of imputed interest on such excess money. 

2. Clause 30B of form 3CD: Thin Capitalisation

• Amount of expenditure by way of interest or similar nature;
• Earnings before interest, tax, depreciation and amortization (EBITDA) during the pre-vious year;
• Amount of interest exceeding 30 percent of EBITDA;
• Details of Interest expenditure brought forward and carried forward. 

3. Clause 43 of form 3CD: CBCR Compliance

• Whether report has been furnished;
• Name of the parent or alternate reporting entity (as may be applicable);
• Date of furnishing report.