The Central Board of Direct Taxes (CBDT) has entered into nine more Unilateral Advance Pricing Agreements (UAPAs) during the month of July, 2018. With the signing of these Agreements, the total number of APAs entered into by the CBDT has gone up to 232, which includes 20 Bilateral Advance Pricing Agreements (BAPAs).

The UAPAs entered into during this month pertain to various sectors and sub-sectors of the economy like manufacturing, engineering, media, irrigation, education, healthcare, telecommunications, industrial gases, pharmaceuticals, etc. and cover international transactions including software development service, manufacturing and sale of engineering good, import of raw materials, payment of royalty and AMP, among others.

Complex issues like capacity utilization adjustment; treatment of AMP expenses etc. have been carefully examined and resolved in some of these agreements. Thus, the APA Scheme continues to make good progress, gaining maturity over the passage of time. It reflects the Government’s commitment towards fostering a non-adversarial tax regime.

Advance Pricing Agreements expand as more unilateral APAs are signed, enhancing certainty and resolving transfer pricing issues. The Central Board of Direct Taxes entered into nine additional Unilateral Advance Pricing Agreements in July 2018, raising total APAs to 232 (including 20 bilateral agreements). The UAPAs cover varied sectors and international transactions-software services, manufacturing and sale of engineering goods, import of raw materials, royalty and AMP payments-and resolve transfer pricing issues like capacity utilization adjustments and the treatment of AMP expenses, reflecting maturation of the APA Scheme and an emphasis on a non-adversarial tax regime.