Group set up to advise CBDT on international taxation and transfer pricing
03 May 2012
The government today announced the setting up of a group headed by revenue secretary R S Gujral, which will advise the Central Board of Direct Taxes (CBDT) on international taxation and transfer pricing.
The need for a review of the taxes on acquisitions and transfers by overseas companies and private funds arose as multinational companies often misuse the transfer pricing mechanism to transfer profits to their subsidiaries in low-tax countries.
Other members include: Som Mittal of the national Association of Software Services Companies, P Y Gurav of the Confederation on Indian Industry, Dinesh Kanabar of the Federation of Indian Chambers of Commerce and Industry, Ved Jain of the Associated Chambers of Commerce and Industry, Mahesh P Sarda of the ICAI, T P Ostwal of IFA India and Mukesh Butani of ICC India.
Transfer of funds through mispricing accounts for 77.6 per cent of global outflows of illicit funds, according to a report of the Global Financial Integrity.
The existing provisions of transfer pricing rules in the country "are not detailed as compared to transfer pricing provisions of developed countries," according to finance minister Pranab Mukherjee.
There is a felt need to upgrade the transfer pricing provisions to meet the challenges of growing intangible economy and various complex cost sharing arrangements, the finance ministry said in a document.
A committee headed by DGIT (international taxation) has already looked into the issue of revising the transfer pricing provisions and submitted its interim report, which is under consideration.
