CBDT signs 7 more unilateral APAs with taxpayers

NEW DELHI: The Central Board of Direct Taxes (CBDT) today said it entered into seven more Advance Pricing Agreements (APAs) in February as it looks to reduce litigation by providing certainty in transfer pricing.

The finance ministry in a statement said that all are unilateral APAs and pertain to pharmaceuticals, automobiles, financial and food & beverages sector.

The international transactions covered in these agreements include manufacturing, provision of software development services, provision of IT enabled services, payment of royalty, provision of contract R&D services, provision of marketing support services.


The APA provisions were introduced in the Income-tax Act, 1961 in 2012 and the 'rollback' provisions were introduced in 2014.

According to the statement, the APA scheme endeavours 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.

"It(APAs) has contributed significantly towards improving the ease of doing business in India," the statement said.