The Central Government, on Thursday, announced the setting up of a 13-member advisory group on international taxation and transfer pricing headed by the Revenue Secretary.
The advisory group, constituted by the Central Board of Direct Taxes (CBDT), will have representatives from the apex chambers of commerce and industry, the software industry association Nasscom, and the chartered accountants' institute ICAI.
According to a Finance Ministry statement here, apart from the Revenue Secretary, other members of the panel from the government side are CBDT Chairman Laxman Das, Director-General of Income-tax (DGIT) (International Taxation), and three joint secretaries in the Department of Revenue dealing with transfer pricing of which Joint Secretary (FT&TR-I) will be the Member-Secretary.
Representing the industry as members of the advisory panel are: Som Mittal of Nasscom, P. Y. Gurav of CII, Dinesh Kanabar of FICCI, Ved Jain of Assocham, Mahesh P. Sarda of ICAI, T. P. Ostwal of IFA India, and Mukesh Butani of ICC India.
It may be recalled that a committee under the chairmanship of DGIT (International Taxation) was set up to look into the issue of revising the transfer pricing provisions and its interim report, submitted some time ago, is under the government's consideration.
The issue has assumed significance in recent years as the transfer pricing mechanism is often misused by multinational entities to transfer profits to their subsidiary units in low or no tax countries. According to a Global Financial Integrity report, illegal transfer of funds through mispricing accounts for 77.6 per cent of the total illicit outflows.
Finance Minister Pranab Mukherjee had also pointed out, time and again, that the existing transfer pricing provisions were not adequate and there was a need to shore up the mechanism to tackle the challenges and complexities of modern day business arrangements.
