Advance Pricing - Gaining Momentum
- US government has agreed to bilateral Advance Pricing Agreements(APAs)
- Over 150 US companies have applied to Indian Tax Authorities to sign such agreements
- These agreements will have greater force with US joining the initiative
- This will provide long-range certainty to tax liability
- It can open doors to big ticket US investment, particularly in defense.
The ITAT in case of “ Goldstar Jewellery Ltd. v. Joint Commissioner of Income-tax” held that longer credit period to Associated Enterprises(AE) is ‘International Transaction’ in terms of Explanation to section 92(1) but is ‘closely linked’ to international transaction of sale or service to AE in terms of Rule 10A(d). This is not a transaction of loan or advance to the AE but it is only an excess period allowed for realization of sales proceeds from the AE. Therefore, the arm’s length interest rate would be the average cost of the total fund available to the assessee and not the rate at which a loan is available.
0 comments:
Post a Comment