Transfer pricing
This query is : Resolved
CA pinki pathak
(Querist)
06 October 2014
Hey everyone,
What is the reason behind deducting other direct costs (such as custom duty) from resale price while calculating arm's length price by Resale Price Method.???
What is the reason behind deducting other direct costs (such as custom duty) from resale price while calculating arm's length price by Resale Price Method.???
Nikhil Kaushik
(Expert)
07 October 2014
because such direct costs are not within the control of the associated enterprises and shall have no bearing on the price so determined. The idea of TP is to arrive that price at which goods/services should have been transacted at. costs such as custom duty are add-ons beyond the control for determination of such price.
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