The Central Board of Direct Taxes (CBDT) issued new guidelines concerning the criteria for selecting cases for specialised transfer pricing scrutiny, clarifying the role of Assessing Officers and Transfer Pricing Officers, and providing guidance for maintenance of the tax authorities’ database of transfer pricing case referrals.
Under Instruction no. 3/2016, referrals to Transfer Pricing Officers will be mandatory when the case is identified for scrutiny on the basis of transfer pricing risk parameters (computer-assisted or manual selection). Cases that are not identified under these criteria nevertheless can be referred to the Transfer Pricing Officers when:
There are rules for when transfer pricing referrals are to be made in other situations. The new guidelines also set forth the role of the Transfer Pricing Officer, the role of Assessing Officers after the determination of the arm’s length price, and other rules.
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