Captive Power Plants: Exclude Distribution Costs in Arm's Length Price for In-House Electricity Supply Under Transfer Pricing Rules.

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....Determining the ALP under transfer pricing provisions - Determination of market value of of electricity - When a captive power plant in an industry supplies electricity to its own manufacturing unit, there is no power distribution cost. The savings of cost of power can be determined only when the rate at which the manufacturing unit of the company purchases power in the open market from the power distribution companies is considered. Imaginary costs which are not incurred cannot guide our decision. - AT....