CURRENT AFFAIRS

Detailed explanation-1: -The APAs have been entered into soon after the Competent Authorities of India and United Kingdom finalised the terms of the bilateral arrangement under the Mutual Agreement Procedure (MAP) process contained in the India-UK DTAA.

Detailed explanation-2: -CCIT (International Taxation), the Competent Page 7 3 Authority of India (either Joint Secretary, FT & TR-I or Joint Secretary, FT & TR-II depending on the country with which the bilateral APA is to be negotiated under the Tax Treaty) has to initiate discussions with his/her counterpart in the other country.

Detailed explanation-3: -The Indian government introduced the Advance Pricing Agreement (APA) programme about six years ago with the objective to provide much needed tax certainty to multinational enterprises (MNEs) operating in India, particularly on their intra-group transactions, and in the process, adopt global best practices.

Detailed explanation-4: -In general, a bilateral APA is a binding agreement between two tax administrations and the taxpayers concerned. This is entered into by reference to the relevant double taxation convention. It governs the treatment for tax purposes of future transactions between associated taxpayers.

Detailed explanation-5: -Advance Pricing Agreement (APA) provisions were introduced in the Income-tax Act, 1961 (Act) w.e.f. 1 July 2012. The rules in respect of the APA scheme have been notified by the Central Board of Direct Taxes (CBDT) by way of insertion of Rule 10F to Rule 10T and Rule 44GA in the Income-tax Rules, 1962 (Rules).