Transfer Pricing
Section 92C-Transfer Pricing-Arm's Length
Price-Tolerance Range
CA. Manoj Gupta
In exercise of the powers conferred by the third proviso to
sub-section (2) of section 92C of the Income-tax Act, 1961 read with proviso to
sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government
has notified vide that Notification No. 46/2023/F. No. 500/1/2014-APA-II],
dated 26-6-2023. where the variation between the arm's length price
determined under section 92C of the said Act and the price at which the
international transaction or specified domestic transaction has actually been
undertaken does not exceed one per cent. of the latter in respect of wholesale
trading and three per cent. of the latter in all other cases, the price at which
the international transaction or specified domestic transaction has actually
been undertaken shall be deemed to be the arm's length price for the
assessment year 2023-2024.
For the purposes of this notification, 'wholesale
trading' means an international transaction or specified domestic
transaction of trading in goods, which fulfils the following conditions, namely
:--
(i) purchase cost of finished
goods is eighty per cent. or more of the total cost pertaining to such trading
activities; and
(ii) average monthly closing
inventory of such goods is ten per cent. or less of sales pertaining to such
trading activities.