Transfer pricing

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Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2014 If the subsidiary company(it is Pvt ltd company, fully owned by foreign company(Parent company) rendered service in India of INR 10 Crore, subsequently the parent company raised bill to subsidiary company of INR 8 Crore i.e. 80% of revenue because the parent company also rendered service in India for the revenue of subsidiary company.

Whether Transfer Pricing will apply and what are the compliance to be done?

Nikhil Kaushik

Nikhil Kaushik (Expert)

11 October 2014 yes transfer pricing will apply.

for compliance refer section 92 to 92F

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2014 In the above case the company has incurred loss for FY 13-14, whether it has to declare minimum profit since transfer pricing apply.

Nikhil Kaushik

Nikhil Kaushik (Expert)

11 October 2014 well that would depend on the computation of arm's length pricing.

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2014 It is software Company, if we consider Cost plus method under arms length pricing , if the billing made by Parent Company to subsidiary company is Rs 8 Crore ,whether it has to declare 10 percent or 15 percent profit (average percent consider) on Rs 8 Crore???

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