The Hindu Business Line : Transfer pricing disputes

This is with reference to "A MAP for transfer pricing disputes" (Business Line, April 2). The author is right that MAP is a clear alternative for dispute resolution, if the actions of the state are not in accordance with the provision of the tax convention between two countries. But with the provision for the transfer pricing being stated in the tax treaties itself, in the Article of Associate Enterprises (AE), tax authorities may not entertain taxpayer grievances under the said provision of the convention.

A taxpayer may alternatively enter into an Advance Price Agreement (APA) to resolve future tax disputes, particularly those relating to transfer pricing. In India, the tax law does not provide alternative dispute resolution such as APA; however, taxpayer may have an APA with the revenue authority of, say, the US which would protect his interest from any irrational addition in the transfer pricing assessment in India.

Kedar Goyal

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