All about form 3CEB + specified domestic transaction + international transaction

23.10.2013
1. Transfer pricing provisions were earlier restricted to international transactions.
With effect from 1.4.2013 , the scope of transfer pricing provisions gets extended
to specified domestic transactions (SDT) exceeding Rupees five crore in
value.
2. Notification no. 41/2013 dated 10th June, 2013 has amended the FORM-3CEB
i.e. report under section 92 E regarding international and specified domestic
transaction.
3. The amended Form No. 3CEB contains 25 clauses requiring disclosure of the
details of the various international transactions and SDT. It is divided into the
three parts:
Part A: requiring the taxpayer to provide general information about itself
alongwith the aggregate value of international transactions and SDT.
Part B: requiring the taxpayer to provide the details of the international
transactions entered into during the Financial Year.
Part C: requiring the taxpayer to provide the details of SDT entered into during
the FY.

Provisions of international transaction (section 92B )

International transaction means a transaction between two or more associated

enterprises, either or both of whom are non residents. The transaction may be in
the nature of purchase, sale of intangible or tangible property or provision of
service or any other transaction having bearing on the profits, income, losses or
assests
of
such
enterprise.

Provisions of Specified domestic transaction (section

92BA)
Specified domestic transaction means :a. Any expenditure in respect of which payment has been made to related party
i.e. having substantial interest (more than 20% voting power) referred to in
section 40 A(2)(b)
1. In case of transactions between two related parties of goods and services, only
the purchaser is to comply and not the seller
2. Only expense side is covered and i.e. only revenue expenditure and not items
of income
b. any transaction referred to in section 80A (correspond to the market
value/arms length price of such goods or services)
c. any transfer of goods or services referred to in sub-section (8) of section 80-IA
(inter unit transfer of goods and services)
d. any business transacted between the assessee and other person as referred to
in sub-section (10) of section 80-IA (applies to transactions between the
assessee and any other person which results in excessive profits in the hands of
the assesse)
e. any transaction, referred to in any other section under Chapter VI-A or section
10AA, to which provisions of sub-section (8) or sub-section (10) of section 80-IA
are applicable. They are listed below:
80-IAB- Deductions in respect of profits and gains by an undertaking or
enterprise engaged in development of Special Economic Zone.
80-IB- Deduction in respect of profits and gains from certain industria
undertakings other than infrastructure development undertakings
80-IC- Special provisions in respect of certain undertakings or enterprises in
certain special category States

 80-ID- Deduction in respect of profits and gains from business of hotels and
convention centres in specified area
80-IE- Special provisions in respect of certain undertakings in North- Eastern
States.
f. any other transaction as may be prescribed.
The above referred specific domestic transactions will be covered
under domestic transfer pricing only if the aggregate value of all the
above specified transactions exceeds the threshold limit of 5 crore
(excluding international transaction)
Article by Anubhav Jain (CA Final), Kota Rajasthan