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Govt not to dilute penalties on COS violating TP norms
Much against the demand of industry, the government on Thursday said that it will not reduce penalty amounting to two per cent of international transaction value for companies violating transfer pricing norms which is expected to come out this week.
Much against the demand of industry, the government on Thursday said that it will not reduce penalty amounting to two per cent of international transaction value for companies violating transfer pricing norms which is expected to come out this week.
“The quantum of penalty is not negotiable," Revenue Secretary S Narayan told reporters while ruling out any possibility of diluting the penalties for erring companies.
In its draft proposals, government stipulates a penalty of two per cent of international transaction value if a company fails to furnish proper documents. The penalty would be Rs 1,00,000 if a company fails to furnish certificates specifying the transactions as prescribed by Central Board of Direct Taxes (CBDT).
Industry experts and global tax consultants had expressed concern over the stringent penalties in the first year of the implementation of transfer pricing clauses and said it might deter foreign investment inflow into India.
“The quantum of penalty is not negotiable," Revenue Secretary S Narayan told reporters while ruling out any possibility of diluting the penalties for erring companies.
In its draft proposals, government stipulates a penalty of two per cent of international transaction value if a company fails to furnish proper documents. The penalty would be Rs 1,00,000 if a company fails to furnish certificates specifying the transactions as prescribed by Central Board of Direct Taxes (CBDT).
Industry experts and global tax consultants had expressed concern over the stringent penalties in the first year of the implementation of transfer pricing clauses and said it might deter foreign investment inflow into India.
Bureau Report