The Tax Department has signed 11 more Advance Pricing Agreements (APAs) with taxpayers covering overseas transactions within group entities so as to reduce litigations.
"Central Board of Direct Taxes (CBDT) has signed 11 unilateral APAs on March 28, 2016. With this signing, India has entered into 59 bilateral and/or unilateral APAs. 50 of these agreements have been signed in the current financial year," the Finance Ministry said in a statement.
Unilateral APAs refer to the signing of agreement with the Indian tax authorities and an MNC, while bilateral APAs also involve the government of the country where an overseas company is located.
APA, introduced in the Income Tax Act in 2012, provides for pact between taxpayers and the IT department on an appropriate transfer pricing methodology for determining the value of assets and ensuing taxes on intra-group overseas transactions.
The agreements cover a range of international transactions including corporate guarantees, royalty, software development services, IT enabled services and trading, the statement said.
"The agreements pertain to different industrial sectors like telecom, media, automobiles, IT services, etc," it said.
The statement said some of the agreements have rollback provisions and provide certainty to the taxpayers for nine years with regard to the covered international transactions.
Rollback provisions in APAs were introduced in the July 2014 Budget to provide certainty on the pricing of international transactions for four years (rollback years) preceding the first year from which APA becomes applicable.
"With the notification of rollback rules in March 2015, the taxpayer has been provided the option to choose certainty in transfer pricing matters with the government for a total of nine years (5 future years and 4 prior years)," the statement said.
Since the notification of the APA scheme on August 30, 2012, about 580 applications for APAs have been received and about half of these contain a request for the rollback provisions.
"The number of applications is indicative of the wide international and national appreciation of the India's APA programme's ability to address complex transfer pricing issues in a fair and transparent manner," it said.
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Later, the Finance Ministry in a statement said, "As per provisions of Section 139(1) of Income-tax Act 1961, Central Board of Direct Taxes extends the due date for filing returns of Income for Assessment Year 2016-2017 from July 31, 2016 to August 5, 2016, in case of taxpayers throughout India who are liable to file their Income-tax by July 31, 2016."
This extension, it said, is given in order to avoid any inconvenience to the taxpayers while making payment of taxes pertaining to returns of income for Assessment Year 2016- 2017 by July 31, 2016 due to bank strike on July 29 and July 31 being a bank-holiday.
