Transfer Pricing

Any cross border transaction between two associated or related parties is subject to transfer pricing provisions in India. With the growing economic activity of the multinational groups across the globe, there had been growing concerns over manipulation of the price charged or paid in the intra-group transactions. The Indian Government introduced Transfer Pricing Regulations vide Finance Act, 2001. 

The Indian Transfer Pricing regulations provide for selecting the most appropriate method among the various transfer pricing methods to justify the arm’s length nature of the transactions. The various methods prescribed by the Indian TP regulations are: 

• Comparable uncontrolled price method;
• Resale price method;
• Cost plus method;
• Profit split method;
• Transactional net margin method; and 
• Such other method as may be prescribed by the Board. 

Over the years, transfer pricing regulations in India are becoming increasingly complex. Last several years witnessed substantial litigation on transfer pricing related issues. These issues covered topics ranging from simpler topics on comparability to more complex economic concepts on re-characterization, marketing intangibles, cost sharing arrangements, financial transactions etc. With the introduction of base erosion and profit shifting (BEPS) the complexity in the transfer pricing provision is further increased. Therefore, it is imperative for the businesses to align their related party transactions with the acceptable transfer pricing policies. 

At ASC, we understand the complexity of the transfer pricing regulations in India and abroad with our rich experience and global presence, and provide end to end solutions to our clients which include both Indian and Foreign enterprises. 

Our team of professionals work closely with the clients in order to enable them to assess and manage the impact of the domestic as well as cross-border related party transactions. Our services comprise of transfer pricing planning for new related party transactions, transfer pricing documentation and transfer pricing benchmarking. 

Our key services include the following:

• Advising companies on devising effective transfer pricing strategies considering their nature of business operations and related party transactions;
• Analysing the nature of business operations and related party transactions and suggesting the most appropriate methods;
• Assisting in maintaining the transfer pricing documentation, viz, report in Form 3CEB, country by country reporting, master file, transfer pricing study report as required by the Indian Transfer Pricing regulations, and filing of the same with the Indian Revenue Authorities;
• Representation before the Indian Revenue Authorities for audit/scrutiny of the transfer pricing issues;
• Representation before the Dispute Resolution Panel and Commissioner of Income-tax (Appeals); 
• Transfer pricing due diligence.