Furnishing application for Advance Pricing Agreement (APA) [ Rule 10I ] - International Taxation - Income Tax

Furnishing application for Advance Pricing Agreement (APA) [ Rule 10I ] Any person, referred to in rule 10G may, if desires to enter into an agreement furnish an application in Form No. 3CED along with the requisite fee. [ Rule 10I(1) ] The fees payable shall be in accordance with following table based on the amount of international transaction entered into or proposed to be undertaken in respect of which the agreement is proposed:- [ Rule 10I(5) ] Amount of international transaction entered into or proposed to be undertaken in respect of which agreement is proposed during the proposed period of agreement. Fee Amount not exceeding ₹ 100 crores 10 lacs Amount not exceeding ₹ 200 crores 15 lacs Amount exceeding ₹ 200 crores 20 lacs It is clarified that the fee is to be computed on the basis of likely value of international transaction for which the APA application is filed. The fee shall be payable by means of electronic transfer directly to the government account as under: Indian Government APA A/c Current A/c number 50140531563 payable at Allahabad Bank, Parliament Street, New Delhi, IFSC Code: ALLA0210163 . The proof of payment towards the fee [ specified in Rule 10I(5) ] may be enclosed along with the APA application in Form No.3CED . Fee paid is non refundable except when the application is not allowed to be proceeded with under Rule 10K . [ Rule 10I(4) ] Application to whom furnished [ Rule 10I(2) ] In case of unilateral APA , the application is required to be furnished in triplicate to the Director General of Income Tax (International Taxation) and In case of bilateral/multilateral APA , the application is required to be furnished in triplicate to the competent authority of India, i.e. Joint Secretary (FT TR-I) in the Ministry of Finance. In case of bilateral/multilateral APA , the applicant or the AE, as the case may be, must initiate the procedure for entering into APA with the other country as well and furnish evidence to the Competent Authority of India regarding the same. Time period for furnishing application of APA Agreement [ Rule 10I(3) ] The application must be filed within the time If the international transaction is of a continuing nature, from dealings that have already occurred, the application must be filed before the first day of the previous year relevant to the first assessment year which the application seeks to cover. For example , if the APA application seeks to cover five years starting from A.Y. 2014-15 to A.Y. 2018-19, the application must be filed before 1 st April, 2013. if the international transaction is the one which the applicant has not yet undertaken, the application may be filed before undertaking such transaction. For example , if the applicant is going to purchase some raw material from its foreign associate for the first time starting from 1 st December 2012 and the application is made before 1 st December 2012, the applicant has a choice to include A.Y. 2013-2014 as the first assessment year in the APA application. In that case, the first condition that for A.Y. 2013-2014 the application should be filed before 1 st April, 2012 shall not apply. Since pre-filing consultation is compulsory before filing an APA application, it is advisable for the applicant to initiate pre filing consultation sufficiently in advance to be able to meet the time requirement of Rule 10I(3) explained above. The APA application is required to be in Form No. 3CED . The form is self-explanatory. However, the following guidance is provided with respect to some of the items: Serial no. 1(g) requires names and designation of the authorized representatives who would be appearing before the authorities. It would be useful if representative files proper authorization from the applicant. Serial no. 13 requires multinational structure, organizational arrangement, operation set-up, including major transaction flows. It will be useful if this information is presented in the form of now chart/ diagram. Serial no. 17 requires detailed functional analysis of the applicant and all relevant entities with respect to the covered transactions. It would be useful if detailed FAR analysis is provided for the applicant and all relevant entities With respect to the covered transactions. After filing the application, a soft copy of the application may also be provided in the first meeting With the competent authority and the APA team.