Negotiation by the competent authority in Bilaterail / multilateral APA and entering an APA - International Taxation - Income Tax

Negotiation by the competent authority in Bilaterail / multilateral APA and entering an APA After receiving the draft Indian position paper the competent authority of India will then carry out negotiation with the other competent authority (ies) in accordance with the provision of Rule 44GA . During this process the competent authority of India will be free to deviate from the draft Indian position paper in order to arrive at negotiated settlement. The competent authority may require the applicant to file additional information and may conduct such enquiry as appropriate. The applicant will not be a part of the negotiation between the two competent authorities but he may be consulted for this purpose by the Indian Competent Authority. On successful completion of negotiations, the competent authority in India shall formalize a MAP arrangement with the competent authority in the other country (ies) and intimate the same to the applicant. The applicant is required to convey acceptance or otherwise of the arrangement within 30 days of such communication. Where the taxpayer accepts the MAP arrangement. the competent authority in India and the applicant shall prepare a mutually agreed draft agreement and the APA agreement shall be entered into by the Board with the assessee after its approval by the Central Government. On behalf of the assessee, the APA shall be signed by the person who is competent to sign its Income-tax Return. Terms of APA Will be in accordance with Rule 10M . Once an APA has been entered into, the competent authority of India shall send a copy of it to the Commissioner of Income tax having jurisdiction over the assessee. In case of failure to reach a MAP arrangement, the applicant shall be informed of the failure to reach an arrangement With the competent authority of the other country(ies). However, the applicant shall have an option to convert the request for bilateral APA to unilateral APA (without payment of additional fee) and inform the competent authority of India in writing. In such cases, the competent authority in India Will forward all the information and documents (except the documents provided by the competent authority of the other country subject to confidentiality clause of the concerned DTAA) to the DGIT (International Taxation) who shall in turn examine the request of unilateral APA as per prescribed procedure.