Budget 2013: Recognise the use of inter-quartile range to determine ALP, demands OPPI

NEW DELHI: The Organisation of Pharmaceutical Producers of India ( OPPI) has proposed that in Budget 2013 use of inter-quartile range to determine the Arm’s Length Price for the international transactions entered into with Associated Enterprises should be recognised.

OPPI says, "Section 92C(2) of the Act recognises arithmetic mean of the comparables as the Arm’s Length Price for the international transaction entered into with Associated Enterprises."

"The use of arithmetic mean tends to skew the comparable set in favour of high margin comparables", it added.

Hence, OPPI suggests that instead, the regulations should prescribe for the use of inter-quartile range, which would be a better representative of the industry scenario.