CBDT achieves important milestone of signing 200 Advance Pricing Agreements APAs


The Central Board of Direct Taxes (CBDT) has crossed an important milestone of having signed 200 Advance Pricing Agreements (APAs). It was achieved after it entered into seven more APAs in February 2018.

All the seven were Unilateral APAs and pertain to pharmaceuticals, automobiles, financial and food & beverages sectors of the economy. With this, CBDT till has entered into 203 APAS (185 Unilateral and 18 Bilateral APAs).

Key Facts

The Central Panel of Direct Taxes (CBDT) entered into seven more Advance Pricing Agreements (APAs) during the month of February, 2018. All the seven are Unilateral APAs. With the signing of these Contracts, CBDT has crossed an important milestone of having authorized 200 APAs.
The total amount of APAs entered into by the CBDT till date has gone up to 203. This includes 185 Unilateral APAs and 18 Bilateral APAs. In the current financial year, the CBDT has inserted into 51 APAs so far (44 Unilateral APAs and 7 Bilateral APAs).

In Feb pertain to the Pharmaceuticals the seven APAs signed, Automobiles, Food and financial & Beverages areas of the economy. 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, Distribution, AMP Expenses, Provision of Executive Design Support Services, Provision of Sourcing Support Services, Payment of Interest, etc.

The APA provisions were introduced in the Income-tax Act, 1961 in 2012 and the “Rollback” provisions were introduced in 2014. The APA structure endeavours to provide certainty to taxpayers in the area of transfer pricing by specifying the methods of prices and setting the prices of international transactions in advance.

The progress of the APA scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner. It has contributed towards improving the ease of doing business in India significantly.
The Central Plank of Direct Taxes (CBDT) entered into seven more Progress Pricing Agreements (APAs) through the month of February, 2018. All of the seven are Unilateral APAs. Using the signing of the Contracts, CBDT has crossed an important milestone of experiencing agreed upon 200 APAs.

Historical Background of C.B.D.T.

 Advance Pricing Agreements

The Central Board of Revenue as the apex body of the Section, charged with the administration of taxes, came into existence consequently of the Central Board of Revenue Act, 1924. Initially the Board was in charge of both direct and indirect taxes. However, when the administration of fees became too unwieldy for one Board to handle, the Table was split up into two, namely the Central Table of Direct Taxes and Central Panel of Excise and Customs with effect from 1.1.1964. This bifurcation was brought about by constitution of two Boards u/s 3 of the Central Plank of Revenue Act, 1963.

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