Advance pricing agreement fixes arm's length price binding taxpayer and tax authorities, voidable for fraud or change in law.

The Board, with Central Government approval, may enter into an advance pricing agreement fixing the arm's length price for an international transaction where the prescribed method is the most appropriate, determining that price in the prescribed manner and allowing further adjustments as necessary. Such agreements are binding on the applicant, the transaction and the Commissioner and subordinate income-tax authorities for a specified duration subject to a maximum limit, cease to bind on change of law, and may be declared void ab initio by the Board for fraud or misrepresentation, with consequential application of the Code excluding the interval between agreement and voiding order.

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