India – USA bilateral: Nearly 100 MAP cases worth Rs 5000 crore resolved

Nearly 100 cases were resolved between India and the US under Bilateral Competent Authority Mutual Agreement Procedure (MAP) / Advance Pricing Agreement (APA) meeting in Washington last week. 

Government on India, in a statement said, "During the meeting, 66 MAP cases relating to Transfer Pricing issues and 42 MAP cases relating to Treaty Interpretation issues were agreed to be resolved successfully. The total amount that was locked-up in dispute in these cases is approximately Rs 5,000 crore and these cases were related to Assessment Years ranging from AY 1999-2000 to AY 2011-12."

The resolved cases pertain to various issues like transfer pricing adjustments made to the international transactions in the nature of Payment of Royalty, Payment of Management Fees, Cost Contribution Arrangements, Engineering Design Services, Contract R&D Services, Investment Advisory Services, Marketing Support Services, Software Development Services, IT enabled Services (both BPO and KPO services) etc. and treaty interpretative issues in the nature of Presence of Permanent Establishment (PE) in India and Profit Attribution to such PEs, disputes pertaining to royalty income v/s business income of foreign companies, 

Government said, "Further, during the meeting, the two Competent Authorities reached an agreement on the terms and conditions of the first ever Bilateral APA involving India and USA."