Towards fostering a non-adversarial tax regime, India's Income Tax Department on Wednesday signed three advance pricing agreements (APAs) with taxpayers designed to reduce litigation by providing certainty in transfer pricing, an official statement said.
"The three APAs signed today pertain to engineering goods and shipping sectors of the economy. The international transactions covered in these agreements include intra-group services and support services," a Finance Ministry statement here said.
"With this, the total number of APAs entered into by the Central Board of Direct Taxes (CBDT) has reached 120 which includes seven bilateral APAs and 113 unilateral APAs," it added.
A total of 56 APAs - 4 bilateral and 52 unilateral - have been Asigned in the current financial year till date, while CBDT expects more APAs to be concluded in the near future.
The APA scheme was introduced in the Income-tax Act in 2012 and the "Rollback" provisions were introduced in 2014.
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It endeavours to provide certainty to taxpayers in the area of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.
The APA scheme has led to more than 700 applications being filed in just four years, the statement added.
--IANS
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