The Central Board of Direct Taxes (CBDT) within the Revenue Department, Union Ministry of Finance had done four new one sided/unilateral Advance Pricing Agreements (APAs) on 7 Feb 2017. These new four APAs are concerned with the Financial, Manufacturing and Information Technology areas. These sectors includes the international transactions that are like, Contract Manufacturing, Software Development Services and IT Enabled Services.
The APA Scheme was introduced in the Income-tax (IT) Act in to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and determining prices of international transactions in advance. The Rollback provisions under this scheme were introduced in 2014.
By these agreements, the total number of APAs entered into by the CBDT has reached 130. It includes 122 Unilateral APAs and 8 bilateral APAs. In the current financial year (2016-17), total 66 APAs (5 bilateral APAs and 61 unilateral APAs) were signed.
The scheme seeks to foster government’s aim of non-adversarial tax regime.
This will benefit in many ways to uplift the developments in the various sectors, benefits are mentioned below:
- (i) There will be Boost in economy and ease in doing business.
- (ii) It will Strengthen the Government’s mission of fostering a non-adversarial tax regime.
- (iii) This will introduce a certainty in the tax law by reducing the compliance costs and make tax regime investment friendly.
- (iv) it will provide certainty to the taxpayers regarding transfer pricing to avoid disputes between taxpayer and tax regulator.
The Central Board of Direct Taxes (CBDT) provides necessary information for policy and planning of direct taxes in India and is also responsible for administration of the direct tax laws through Income Tax Department.
The CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963.
This is governed by the CBDT Chairman and it also includes six members and all of the members are Special Secretary to the Government of India.
- Member (Income Tax)
- Member (Legislation and Computerisation)
- Member (Revenue)
- Member (Personnel & Vigilance)
- Member (Investigation)
- Member (Audit & Judicial)