28 September, 2020

A Cut Too Much

MNCs cry foul at auditing transfer pricing deals

Tribhuvan Tiwari
A Cut Too Much

Tax On The Run

  • Govt getting more aggressive on auditing MNCs transfer pricing, especially on fresh issues, royalties, advertising, marketing and brand promotion costs
  • In the last two years alone, an estimated 3,000 cases, big and small, have gone into litigation with an estimated Rs 50,000 crore stuck in the process
  • India’s transfer pricing laws are complicated, subjective and open to interpretation.


In this edgy pre-Budget season, anything to do with the taxman attracts undue attention, and  some extreme reactions. So, if some are dubbing the move of the revenue and tax departments to scrutinise transfer pricing transactions for various multinationals as an act of “economic nationalism by an emerging economy”, the taxman’s target—the MNCs—are screaming blue murder. There are over 3,000 such cases (and rising) under litigation at the moment, something that is keeping an army of corporate legal experts, tax and accounting...



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