Applicability of Transfer Pricing provision

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Bimal Thacker (Querist)

09 February 2011 M/S “M” Pvt. Ltd Co. having three directors Mr. A, Mr. B &C (Indian resident) wants to appoint Mr. D (non resident) as director. Mr. D is employee of M/S “L” of Switzerland.

M/S M Pvt. ltd is in the business of repairs and maintenance and supply of parts of Machinery. M/S M Pvt. Ltd purchases more then 90 percent of parts from M/S L of Switzerland. M/S M Pvt. Ltd does majority of repairs works in India and supply of parts is of Machinery supply by L to Indian markets. Some times M/S M Pvt. Ltd billed to M/S L for repair worked done on behalf of M/S L (machinery under warranty period).

Whether the transaction between M/S M Pvt. Ltd and M/S L of Switzerland is international transaction under chapter X i.e. Section 92 etc before appointment of Mr. D or after appointment of Mr. D? What care should be taken?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

13 February 2011 Your case is already covered in sec.92A(2)(h) and there is no additional TP requirement if Mr. D is appointed as Director.

Anuj
9810106211

Bimal Thacker

Bimal Thacker (Querist)

14 February 2011 Thanks Mr. Anuj Gupta, But I thinks Section 92A(2)(h) Covers Materials & Consumables for Manufacture or processing of goods or articles ? M/S M Pvt. Ltd is not manufacturer or processor. Whether any other section - subsection will hit?

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