Turnover filters and receivables benchmarking reshape software-services transfer pricing: high-turnover comparables excluded and interest recomputed at LIBOR plus 2%

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....Transfer pricing comparables for software development services should exclude companies with substantially higher turnover where their inclusion would distort the margins of a smaller captive service provider. Applying the accepted turnover range of Rs. 1 crore to Rs. 200 crores, the Tribunal directed exclusion of companies exceeding the upper limit and recomputation of the arm's length price. Foreign-currency receivables from associated-enterprise transactions were treated as international transactions for transfer pricing purposes. However, the interest adjustment was not accepted at the rate previously applied; it was directed to be recomputed using LIBOR plus 2%. The appeal was allowed for statistical purposes.....