Executive Summary:
This notification from the Central Board of Direct Taxes amends the Income-tax Rules, 1962, concerning the determination of primary adjustment to transfer price. The amendments involve rules related to excess money repatriation, interest charges, and the definition of international transactions. The rules take effect from the date of publication in the Official Gazette, September 30, 2019.
Key Points / Main Content:
* **Amendments to Rule 10CB (Excess Money):**
* Clarifies that "excess money" includes "part thereof".
* **Substituted Clause for Rule 10CB(1)(A)(iii):**
* Specifies dates for primary adjustment to transfer price based on advance pricing agreements (APA) under Section 92CC.
* If APA is entered on or before the return filing due date: from the date of filing return under Section 139(1).
* If APA is entered after the return filing due date: from the end of the month the APA was entered.
* **Substituted Clause for Rule 10CB(1)(B)(v):**
* Specifies the date for primary adjustment to transfer price determined by resolution under mutual agreement procedure as from the date of giving effect by the Assessing Officer under rule 44H.
* **Insertion of Subrule 3 after Rule 10CB(2):**
* Defines when interest is chargeable on non-repatriated excess money or part thereof, based on specific clauses and subrules.
* In cases referred to in clause (i), in sub-clause (a) of clause (iii) and clause (iv) of sub-rule (1), from the due date of filing of return under sub-section (1) of section 139 of the Act.
* In cases referred to in clause (ii) of sub-rule (1), from the date of the order of Assessing Officer or the appellate authority, as the case may be.
* In cases referred to in sub-clause (b) of clause (iii) of sub-rule (1), from the end of the month in which the advance pricing agreement has been entered into by the assessee under section 92CC of the Act.
* In cases referred to in clause (v) of sub-rule (1), from the date of giving effect by the Assessing Officer under rule 44H to the resolution arrived at under mutual agreement procedure.
* **Substituted Explanation for Rule 10CB:**
* Defines "International transaction" with the same meaning as in Section 92B of the Act.
* Specifies that the rate of exchange for calculating the value in rupees of the international transaction denominated in foreign currency shall be the telegraphic transfer buying rate of such currency on the last day of the previous year in which such international transaction was undertaken. The telegraphic transfer buying rate shall have the same meaning as assigned in the Explanation to rule 26.
Impact Analysis:
* **Assessees:**
* Impact: Affected by the revised rules for determining primary adjustment to transfer price, repatriation of excess money, and interest charges. Need to comply with the new timelines and conditions based on APAs or mutual agreement procedures.
* Action Required: Review existing transfer pricing policies and procedures to ensure compliance with the amended rules, particularly concerning repatriation timelines and interest implications.
* **Assessing Officers:**
* Impact: Responsible for implementing the amended rules, including determining the applicable dates for primary adjustments and interest charges.
* Action Required: Understand the changes to Rule 10CB and apply them correctly when assessing transfer pricing cases, especially those involving APAs or mutual agreement procedures.
* **Central Board of Direct Taxes:**
* Impact: Responsible for the overall administration and enforcement of the amended Income-tax Rules.
* Action Required: Ensure that the amended rules are effectively communicated to all relevant stakeholders and provide guidance on their interpretation and application.
Key Entities Referenced
Central Board of Direct Taxes: The issuer of the notification and a key authority within the Department of Revenue, Ministry of Finance.
Income-tax Act, 1961: The primary legislation being amended by the notification. Referred to by its year and act number (43 of 1961).
Income-tax Rules, 1962: The set of rules being amended by the notification. This notification introduces the 'Incometax 11th Amendment Rules, 2019' to these rules.
Incometax 11th Amendment Rules, 2019: The title of the amendment rules introduced by this notification.
Section 92CE: A section of the Income-tax Act, 1961 related to transfer pricing, specifically referenced in the context of powers conferred for making the rules.
Section 295: A section of the Income-tax Act, 1961 related to powers to make rules, specifically referenced in the context of powers conferred for making the rules.
Section 92CC: A section of the Income-tax Act, 1961 related to advance pricing agreements.
Section 139: A section of the Income-tax Act, 1961 related to the filing of returns.
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EXTRAORDINARY
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PART II—Section 3—Sub-section (i)
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No. 576] NEW DELHI, MONDAY, SEPTEMBER 30, 2019/ASVINA 8, 1941
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((((ररररााााजजजज(cid:4)(cid:4)(cid:4)(cid:4)वववव ििििववववभभभभाााागगगग))))
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अअअअििििधधधधससससचचूूचचूू ननननाााा
नई (cid:1)द(cid:3)ली, 30 िसत(cid:9)बर, 2019
आआआआयययय----ककककरररर
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प(cid:24)ठत धारा 92 गङ क(cid:22) उपधारा (2) $ारा (cid:16)द% शि’य( का (cid:16)योग करत े )ए, आय-कर िनयम, 1962 का और सशं ोधन करन े
के िलए िन,िलिखत िनयम बनाता ह,ै अथा(cid:21)त:् —
1. सिं (cid:18)2 नाम और (cid:16)ारंभ.—
(1) इन िनयम( का सिं (cid:18)2 नाम आय-कर (7यारहवा ँसंशोधन) िनयम, 2019 ह ै।
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2. आय-कर िनयम, 1962 के िनयम 10 गख म,(cid:13)—
(I) दोन( @थान( पर आने वाल े“अित(cid:24)र’ धन” शBद( के @थान पर “अित(cid:24)र’ धन या उसका भाग” शBद( को रखा जाएगा;
(II) उप-िनयम (1) म,(cid:13)—
(अ) खंड (iii) के (cid:4)थान पर िन(cid:11)िलिखत खंड रखा जाएगा, अथा(cid:21)त : —
5125 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
“(iii) उस दशा म (cid:24)जहा ंपूव (cid:21)वष(cid:21) के संबधं म (cid:24)अंतरण क!मत के िलए "ाथिमक समायोजन िनधा%(cid:21) रती ’ारा अिधिनयम
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*कया गया ह ैतो अिधिनयम क! धारा 139 क! उपधारा (1) के अधीन िववरणी फ़ाइल करन ेक! तारीख स;े
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तारीख स”े ;
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“(3) उप-िनयम (2) म (cid:24)िनCदD Eयाज अित%र7 धन या उसके भाग पर जो सं"FयावGतत नहH *कया गया ह ै—
(क) खंड (i), खंड (iii)) के उप-खंड (क) और उप-िनयम (1) के खंड (iv) म(cid:24) िनCदD मामलI म,(cid:24) अिधिनयम क! धारा 139 क!
उपधारा (1) के अधीन िववरणी को फ़ाइल करन ेक! िनयत तारीख स;े
(ख) उप-िनयम (1) के खंड (ii) म (cid:24)िनCदD मामलI म,(cid:24) यथाि(cid:4)थित, िनधा(cid:21)रण अिधकारी या अपीलीय "ािधकारी के आदशे क!
तारीख स े;
(ग) उप-िनयम (1) के खंड (iii) के उप-खंड (ख) म(cid:24) िनCदD मामलI म,(cid:24) अिधिनयम क! धारा 92गग के अधीन िनधा%(cid:21) रती
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"भाय (cid:21)*कया जाएगा।”;
(IV) @पCीकरण के @थान पर िन,िलिखत @पCीकरण रखा जाएगा, अथात(cid:21) ् : —
““““(cid:4)(cid:4)(cid:4)(cid:4)पपपप(cid:20)(cid:20)(cid:20)(cid:20)ीीीीककककररररणणणण- इस िनयम के "योजनI के िलए, —
(क) “अतं रा(cid:21)Mीय संNवहार” का वही अथ (cid:21)होगा जो इसे अिधिनयम क! धारा 92ख म(cid:24) *दया गया ह;ै
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पूव(cid:21) वष(cid:21) के अिं तम *दन का ऐसी मुOा का तार अंतरण =य दर होगा िजसम (cid:24)ऐसा अंतरा(cid:21)Mीय सNं वहार *कया गया ह ैऔर
“तार अंतरण =य दर” का वही अथ (cid:21)होगा जसै ा िनयम 26 के (cid:4)पDीकरण म(cid:24) *दया गया ह”ै ।
[अिधसूचना स.ं 76/2019/फा.सं. 370142/12/2017-टीपीएल]
नीरज कुमार, उप सिचव (कर नीित और िवधायन (cid:16)भाग)
(cid:21)(cid:21)(cid:21)(cid:21)टटटट(cid:23)(cid:23)(cid:23)(cid:23)पपपपणणणण:::: मूल िनयम( को भारत के राजप<, असाधारण, भाग II, खंड 3, उप-खंड (ii) म (cid:13)अिधसूचना सFं यांक का.आ. 969(अ),
तारीख 26 माच,(cid:21) 1962 $ारा (cid:16)कािशत (cid:1)कया गया था और इनम (cid:13)अंितम संशोधन अिधसूचना स.ं सा.का.िन 694(अ)
तारीख 27 िसत(cid:9)ब र, 2019 $ारा (cid:1)कया गया था ।¹Hkkx IIµ[k.M 3(i)] Hkkjr dk jkti=k % vlk/kj.k 3
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 30th September, 2019
Income-tax
G.S.R. 701(E).—In exercise of the powers conferred by sub-section (2) of section 92CE read with section 295
of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to
amend the Income-tax Rules, 1962, namely: —
1. Short title and commencement. —
(1) These rules may be called the Income-tax (11th Amendment) Rules, 2019.
(2) They shall come into force with effect from the date of the publication in the Official Gazette.
2. In the Income-tax Rules, 1962, in rule 10CB.—
(I) for the words “excess money” occurring at both the places, the words “excess money or part thereof” shall be
substituted;
(II) in sub-rule (1), —
(A) for clause (iii), the following clause shall be substituted, namely: —
“(iii) in a case where primary adjustment to transfer price is determined by an advance pricing agreement
entered into by the assessee under section 92CC of the Act in respect of a previous year, -
(a) from the date of filing of return under sub-section (1) of section 139 of the Act ifthe advance pricing
agreement has been entered into on or before the due date of filing of return for the relevant previous
year;
(b) from the end of the month in which the advance pricing agreement has been entered into if the said
agreement has been entered into after the due date of filing of return for the relevant previous year”;
(B) for clause (v), the following clause shall be substituted, namely: —
“from the date of giving effect by the Assessing Officer under rule 44H to the resolution arrived at under mutual
agreement procedure, where the primary adjustment to transfer price is determined by such resolution under a
Double Taxation Avoidance Agreement entered into under section 90or section 90A of the Act”;
(III) after sub-rule (2), the following sub-rule shall be inserted, namely:—
“(3) The interest referred to in sub-rule (2) shall be chargeable on excess money or part thereof which is not
repatriated—
(a) in cases referred to in clause (i), in sub-clause(a) of clause (iii) and clause (iv) of sub rule(1), from the due
date of filing of return under sub-section (1) of section 139 of the Act;
(b) in cases referred to in clause(ii) of sub-rule(1), from the date of the order of Assessing Officer or the
appellate authority, as the case may be;
(c) in cases referred to in sub-clause(b) of clause (iii) of sub-rule(1), from the end of the month in which the
advance pricing agreement has been entered into by the assessee under section 92CC of the Act;
(d) in cases referred to in clause (v) of sub-rule (1), from the date of giving effect by the Assessing Officer under
rule 44H to the resolution arrived at under mutual agreement procedure.”;
(IV) for the Explanation, the following Explanation shall be substituted, namely: —
“Explanation- For the purposes of this rule, —4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
(A) “International transaction” shall have the same meaning as assigned to it in section 92B of the Act;
(B) The rate of exchange for the calculation of the value in rupees of the international transaction
denominated in foreign currency shall be the telegraphic transfer buying rate of such currency on the
last day of the previous year in which such international transaction was undertaken andthe“telegraphic
transfer buying rate” shall have the same meaning as assigned in the Explanation to rule 26.”
[Notification No.76 /2019/ F.No.370142/12/2017-TPL]
NIRAJ KUMAR, Dy. Secy. (Tax Policy and Legislation Division)
Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide
notification number S.O. 969(E), dated the 26th March, 1962 and was last amended, vide notification number
G.S.R 694(E) dated 27.09.2019.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.