New Delhi, July 18 (IANS) In a move designed to reduce tax litigation, the Central Board of Direct Taxes (CBDT) on Monday signed seven more unilateral Advance Pricing Agreements (APAs) with Indian taxpayers.
"With today's signing, the total number of APAs entered into by the CBDT has reached 77. This includes 3 bilateral APAs and 74 unilateral APAs.
"In the current financial year, a total of 13 Unilateral APAs have been entered into so far," a Union Finance Ministry statement said here.
The latest APAs signed with taxpayers pertain to various sectors like banking, information technology and automotives.
APAs provide for signing an agreement between a taxpayer and the income tax department on an appropriate transfer pricing methodology for determining the value of assets and taxes on intra-group overseas transactions.
The scheme attempts 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, the ministry said.
"Since its inception, the APA scheme has attracted tremendous interest from taxpayers that has resulted in more than 700 applications (both unilateral and bilateral) having been filed in just four years," the statement said.
"The progress of the APA scheme strengthens the government's mission of fostering a non-adversarial tax regime," it added.
According to the government, the APA mechanism helps to achieve tax certainty for a period of up to nine years.
