Menu
  • Home
  • Our Partners
  • Practice Areas
        • Corporate & Commercial
        • Education
        • Real Estate
        • Intellectual Property
        • Insurance
        • Dispute Resolution
        • Labour and Employment
        • Telecommunications, Satellite and IT
        • Media & Entertainment
        • Banking, Finance and Capital Markets
        • Life Sciences & Healthcare
        • Licensing, Franchising and Trading
        • Outsourcing
        • Infrastructure Projects, Energy, Mining, Transportation, Water
        • Taxation
  • Resources
  • Media
    • Videos
    • Gallery
  • Careers
  • Contact Us
LexUpdate
August 21, 2012 New Delhi, INDIA
Government to Implement Advance Pricing Arrangements

If you have questions or would like additional information on the material covered herein, please contact:

The Government of India (“GoI”) has decided to give a breather to various multinational companies having business in India, from the aggressive tax administration in…

Government to Implement Advance Pricing Arrangements

The Government of India (“GoI”) has decided to give a breather to various multinational companies having business in India, from the aggressive tax administration in transfer pricing matters. The GoI has confirmed that it will
soon notify guidelines for Advance Pricing Arrangements (“APAs”).

In common parlance, APAs are agreements executed in advance between tax payers and the tax authorities with respect to pricing of transactions between the foreign and local entities of the same group, operative for a specific period. Transfer pricing norms seek to prevent manipulation of prices in transactions between related parties, which manipulation may lead to transfer of income from high tax jurisdictions to lower tax jurisdictions. In the process, the
high tax jurisdiction tends to lose on tax collections. Administration of transfer pricing norms leads to tax disputes and transfer pricing adjustments.
By virtue of the APAs, the multinational companies will be in a position to negotiate their potential tax liability in related party transactions with the tax authorities in advance. APAs therefore reduce possibility of post transaction
pricing related disputes. In addition, the APAs, being for a specified duration, accord a certain level of protection to the multinational parties against retroactive tax, a practice Indian tax authorities have been much criticized for in the
recent past.
The GoI would however need to prescribe time bound determinations and stringent confidentiality norms for the mechanism to be frequently used by the multinational corporations.

Free Medicines for All

The GoI is planning to distribute free medicines across India through Government hospitals as also making such medicines available through Government stores at a nominal price.
The GoI model is inspired by the “Medicines Supply Corporation’ established in the State of Tamil Nadu in India, which procures generic medicines in bulk at almost 1/20th of the market price, and supplies them to the in-house patients in the Government hospitals. The Central Government is planning to set-up a similar ‘Central Procurement Agency’ (“CAP”) to procure generic medicines
in bulk and at cheaper rates, to be distributed across India in cooperation
with the state governments. The CPA will also be responsible for specifying
uniform standards for procurement of the medicines, and to monitor the procurement process.
This ambitious initiative of the GoI is expected to take a couple of years of
pre-implementation planning.

By: Alishan Naqvee, Partner (anaqvee@lexcounsel.in) and Swagateeka Patel, Associate (spatel@lexcounsel.in)

Feedback

Disclaimer: LexCounsel provides this e-update on a complimentary basis solely for informational purposes. It is not intended to constitute, and should not be taken as, legal advice, or a communication intended to solicit or establish any attorney-client relationship between LexCounsel and the reader(s). LexCounsel shall not have any obligations or liabilities towards any acts or omission of any reader(s) consequent to any information contained in this e-newsletter. The readers are advised to consult competent professionals in their own judgment before acting on the basis of any information provided hereby.

DELHI OFFICE: B-4/232, Safdarjung Enclave, New Delhi, 110029, India

Contact Email: info@lexcounsel.in

Contact Phone: +91.11.41662861

ODISHA OFFICE: D-36, Defence (AWHO) Colony Padmapani Vihar, Niladri Vihar Bhubaneswar, Odisha -751 021, India

Contact Email: odisha@lexcounsel.in

Contact phone: +91.7735414855

Lex Counsel

Follow Us

  • Terms Of Use
  • Privacy Policy

Copyright 2022 LexCounsel. All right reserved.

Purpose and Disclaimer

The purpose of this website is to serve as a complimentary and limited source of information on Indian legal and regulatory developments, as well as an avenue to facilitate placement of qualified lawyers and law students at suitable positions available within LexCounsel.

In compliance with the Indian regulations, including the rules of the Bar Council of India, this website is neither intended to solicit any work, nor intended to advertise LexCounsel in any manner whatsoever, nor intended to create any attorney-client relationship with LexCounsel. By accessing this website and its contents, no attorney-client relationship is either being created, or intended to be created between LexCounsel and you/your entity (“You”).

To proceed viewing the contents of this website, please click the "I AGREE" icon below ONLY IF You agree with, confirm and acknowledge each of the following:
  • You wish, and accordingly request, to gain more information about LexCounsel at your own volition and initiative.
  • You have not received any express or implied suggestion, invitation, inducement, advertisement or solicitation of any sort whatsoever from LexCounsel or any of its members to create an attorney-client relationship through or based on this website.
  • You have read, and You agree with the other Essential Terms of Use of this website.
Essential Terms Of Use
User Acknowledgment:
I acknowledge having read and understood the Purpose and Disclaimer above, and: