Transfer price

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Querist : Anonymous

Querist : Anonymous (Querist)

20 January 2013
Hi,

If a company is not meeting the Arm Length Price (International Transaction - with group companies), what is the penalty company needs
to pay. can any one clarify

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 January 2013 Penalty provisions of Section 271AA prescribe Penalty of a sum equal to 2% of the value of each international transaction .
This penalty may be levied in addition to Section 271 and 271BA penalties. .

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Querist : Anonymous

Querist : Anonymous (Querist)

20 January 2013 Hi,

Whether 2% penalty is for not maintaining the record or not maintaining the minimum margin (above case is trading business).

Whether the auditor will sign the TP report with negative margin in trading buz

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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26 July 2013 Yes I agree with the expert and they penalty does not relate to maintenance or non maintenance of records. It is levied on the violation of pricing norms which means it is for discouraging under invoicing.

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