The Central Board of Direct Taxes (CBDT) on Monday entered into seven unilateral advance pricing agreements (APAs) with Indian taxpayers. Some of these agreements also have a “rollback” provision in them.
The seven APAs signed today pertain to various sectors of the economy like banking, information technology and automotives. The international transactions covered in these agreements include software development services, IT enabled services (BPOs), engineering design services and administrative & business support services.
With today’s signings, the total number of APAs entered into by the CBDT has reached 77. This includes 3 bilateral APAs and 74 unilateral APAs. In the current fiscal, a total of 13 unilateral APAs have been entered into so far.
While the APA scheme was introduced in 2012, the “rollback” provisions were introduced in 2014. The PA 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 attracted tremendous interest and that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years.
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