India signs 16 advance pricing agreements in March though large backlog remains

By Ajit Jain, Mumbai

India’s Central Board of Direct Taxes on 3 April announced that it entered into 14 unilateral advance pricing agreements (APAs) and two bilateral APAs with Indian taxpayers in March.

The two bilateral APAs have been reportedly entered with the USA. The APAs pertain to various sectors, including telecommunication, automobiles, pharma, beverages, banking, finance, and insurance.

With the signing of these 16 APAs, the total number of APAs signed by India since the launch of APA program has reached  219. The APAs signed are captured in the following table:

APAs signed during	Bilateral	Unilateral	Total
FY 2013–14	0	5	5
FY 2014–15	1	3	4
FY 2015–16	2	53	55
FY 2016–17	8	80	88
FY 2017–18	9	58	67
Total APAs signed	20	199	219

The Indian APA program was launched in August 2012 and the applications started flowing in by February–March 2013. It is praiseworthy that in the very first year of the operation of the program India concluded 5 APAs.

In FY 2016–17 the number of APAs signed reached its pinnacle of 88, including 8 bilateral APAs. However, in the financial year ending March 2018, the total number of APAs signed slipped down to 67.

This financial year began with a pendency of 644 APAs and during the year only 67 APAs were signed.

The number of new applications filed during the financial year is not yet known. Without counting the new applications, the Indian APA authorities are left with a huge backlog of 577 APAs pertaining to the earlier years.

There could be a number of APAs for which the period of operation of 5 years has already elapsed. The fate of such APAs and renewal thereof will be known in the current financial year.

The government is likely to release the annual report on the APA for financial year 2017-18 by April end. Stay tuned.

Siddhesh Chaugule contributed to this article.