Application for Advance Ruling - transfer pricing
This query is : Resolved
23 January 2025
Hello everyone,
A ltd is 100% subsidiary of a german company incorporated in the year 2022-23 (captive unit) to provide IT services to its parent/group companies from India.
they are billing @ cost+13%. However consultant has opined that industry margin is 18-20%.
My question
1. Is it advisable to file application before AAR ?
2. I am worried that if order is unfavourable then AO may make primary adjustments for 22-23 and 23-24 as well even though we have TP report from reputed auditor ?
A ltd is 100% subsidiary of a german company incorporated in the year 2022-23 (captive unit) to provide IT services to its parent/group companies from India.
they are billing @ cost+13%. However consultant has opined that industry margin is 18-20%.
My question
1. Is it advisable to file application before AAR ?
2. I am worried that if order is unfavourable then AO may make primary adjustments for 22-23 and 23-24 as well even though we have TP report from reputed auditor ?
15 February 2025
I feel it is better not to go for AAR. Just wait for the assessment to get completed. However if you feel that better not to get into litigation you may consider higher markup percentage.
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