looking to curb unfair imports
union government is seriously looking into means of protecting indigenous
industries against the onslaught of unfair imports. It also, simultaneously,
hopes to strengthen the customs valuation machinery. In order to
ensure that indigenous industries in the country are protected against
unfair imports, the union Revenue Ministry had initiated concrete
steps to tackle issues related to transfer pricing.
The Income Tax department and Customs are making coordinated
efforts to tackle issues arising from transfer pricing. Transfer
pricing refers to a price which is not at arms length. Financial
transactions of goods and services between various divisions of
the same country, or between affiliates from one country to another
are generally susceptible to transfer pricing practices. A large
percentage of international transactions are between related parties.
In such transactions, prices can be arbitrarily fixed between them.
The result of these transactions is loss of revenue for customs.
In fact, transfer pricing is an issue of major concern for authorities
that deal with direct taxes all over the world, including authorities
The Central Board of Excise and Customs (CBEC) is
already coordinating with the Central Board of Direct Taxes (CBDT),
and high level discussions are on between these two apex bodies
of the Revenue Department, to find solutions to transfer pricing-related
issues. Additionally, the Directorate of Valuation, Customs
and the Directorate of Antidumping are jointly working on
foolproof measures to tackle undervalued imports and imports at