The Finance Ministry has set up a committee to look into the issue of revising the transfer pricing regulations. This committee will submit its report by end March, the Finance Minister, Mr Pranab Mukherjee, has said.
The existing transfer pricing provisions, which were introduced in 2001, do not have detailed provisions as compared to the regulations of developed countries.
There is a need to upgrade these transfer pricing provisions to meet the challenges of growing intangible economy and various complex cost-sharing arrangements, Mr Mukherjee said here.
The committee has been set up by the Director-General of Income-Tax (international taxation) at the behest of the Finance Minister.
To formulate Strategy
For fair, swift and uniform application of law on international taxation and transfer pricing, the Director- General of Income-Tax (international taxation) has been asked to formulate a strategy by the end of this month. A committee has also been constituted to formulate a strategy for proactive and comprehensive representation before the Authority for Advance Rulings (AAR), Tribunal, High Court and the Supreme Court by February.
Indian transfer pricing auditors have so far made adjustments to the tune of Rs 45,000 crore.
For cases under the mutual agreement procedure (MAP), a substantial part of the additions have also been confirmed in MAP resolution, which speaks highly about the quality of TP audits, Mr Mukherjee noted.
Training abroad
The Finance Ministry has also been imparting intensive training abroad to 36 revenue officials in the area of transfer pricing and international taxation, in the first 10 months of the current fiscal.
The process of continuous upgradation of skills is being institutionalised, a Revenue Department official said.
Special monetary incentives are also to be provided for officers posted in directorates dealing with international taxation and transfer pricing.