For almost a decade, the corporate community and transfer pricing (TP) professionals had been relentlessly putting forth pre-budget recommendations for introduction of the range concept (instead of the stringent arithmetic mean), and for allowing the use of multiple year data.
The plea was finally heard in the Budget 2014, when the Finance Minister in his speech proposed the introduction of a “range” and “multiple year data” with the objective of reducing TP litigation. The details were, however, not spelt out and the rules were to be prescribed.
The wait is finally over, as the Central Board of Direct Taxes (CBDT) has developed a draft scheme, containing detailed provisions as regards the application of “range concept” and the use of “multiple year data”. These would be effective 1 April 2014, i.e., applicable for financial years 2014-15 and onwards.
The CBDT has invited comments and suggestions of stakeholders and general public on the proposed scheme by 31 May 2015.
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