The CBDT has signed two more unilateral advance pricing agreements (APAs) with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.
The two APAs signed today pertain to the Information Technology and automobile sectors. The international transactions covered in these agreements include software development services, IT enabled services, manufacturing and business support services, an official statement said.
With this, the total number of APAs entered into by the CBDT has reached 117. This includes 7 bilateral APAs and 110 Unilateral APAs.
In the current financial year, a total of 53 APAs (4 bilateral APAs and 49 unilateral APAs) have already been entered into.
The APA Scheme was introduced in the Income-tax Act in 2012 and the 'Rollback' provisions were introduced in 2014.
"The scheme endeavour to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance," the official added.
Since its inception, the APA scheme has evinced a lot of interest from taxpayers and that has resulted in more than 700 applications (both unilateral and bilateral) being filed in just four years, CBDT said.
The progress of the APA scheme strengthens the government's resolve of fostering a non-adversarial tax regime.
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