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An Analysis of Transfer Pricing Disputes in India

Author

Listed:
  • Tandon, Suranjali

    (National Institute of Public Finance and Policy)

  • Damle, Devendra

    (National Institute of Public Finance and Policy)

Abstract

The transfer pricing regime in India, since its inception, has been criticised for pronounced and protracted litigation. In this context, this paper evaluates the transfer pricing regime over the span of a decade (2003-04 to 2013-14) using 6731 case orders. It presents the first evidence of the duration of transfer pricing cases, delineated into pre-ITAT and post-ITAT phases, and compares the performance of the two pre-ITAT forums - the CIT(A) and the DRP. Further, the paper presents evidence on issues such as repeated litigation on identical grounds and remand orders that place companies in cycles of litigation. We find that while the DRP, as an alternative dispute resolution mechanism, may have led to a reduction in case duration in the initial years, this benefit may have now peaked leading to a convergence across forums. Further, we find that often grounds for litigation are similar across years, and therefore joint audits for multiple years may be a superior strategy for transfer pricing cases than the current one.

Suggested Citation

  • Tandon, Suranjali & Damle, Devendra, 2019. "An Analysis of Transfer Pricing Disputes in India," Working Papers 19/266, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:19/266
    Note: Working Paper 266, 2019
    as

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    File URL: https://www.nipfp.org.in/media/medialibrary/2019/05/WP_266_2019.pdf
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    References listed on IDEAS

    as
    1. Datta, Pratik & Surya Prakash B. S. & Sane, Renuka, 2017. "Understanding Judicial Delay at the Income Tax Appellate Tribunal in India," Working Papers 17/208, National Institute of Public Finance and Policy.
    2. Sreyan Chatterjee & Gausia Shaikh & Bhargavi Zaveri, 2017. "Watching India's Insolvency Reforms: A New Dataset of Insolvency Cases," Working Papers id:12105, eSocialSciences.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Pandey, Radhika & Patnaik, Ila, 2019. "Fiscal policy cyclicality in South Asian economies," Working Papers 19/268, National Institute of Public Finance and Policy.
    2. Pandey, Radhika & Patnaik, Ila & Shah, Ajay, 2019. "Measuring business cycle conditions in India," Working Papers 19/269, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Transfer pricing ; Income Tax Appellate Tribunal ; Dispute Resolution Panel;
    All these keywords.

    JEL classification:

    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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