Transfer Pricing Consultation
Transfer pricing was introduced basically to curb the tax evasion practices followed by many Multinational Groups having presence in India. These Multinational Groups normally transfer their taxable profits earned in India to some other country, where the rates of tax are lower than in India.
Any international transaction undertaken between associated enterprises would be subject to transfer pricing regulations and the transfer price charged/paid should be at arm’s length.
Earlier the Transfer pricing clause was applicable to the International Transaction only, but now it has been extended to Domestic transaction.
What was the purpose of introducing Domestic Transfer Pricing?
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Presently, there is no method prescribed to determine reasonableness of expenditure to re-compute the income in related party transactions.
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There is need to provide objectivity in determination of income and determination of reasonableness of expenditure in domestic related party transaction.
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There is need to create legally enforceable obligation on assessee to maintain proper documentation.
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Based on the above observations of the honourable Supreme Court, the Finance Act, 2012 has extended the applicability of the transfer pricing provisions for specified domestic related party transactions.
Services Offered at HVJ :
Conducting Transfer Pricing Study and submission of TP Report
Issue of Certification for repatriation of funds from India