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Bhavesh K. Savla, Chartered Accountants shall be pleased to provide any or more of the following Services in our usual professional manner of working:

Transfer Pricing
A. What is Transfer Pricing and why it is important for Indian businesses?
Transfer pricing is the process of setting transfer prices between associated enterprises or related parties where at least one of the related parties is a non-resident. Transfer Price is the price at which an enterprise transfers goods and services, intangible and intangible assets, services or lending/ borrowing money to associated enterprises. Transfer prices are generally decided prior to entering the transaction and they are audited/ reviewed by the auditor after the year finalization.
Transfer Pricing In the example, we see that ABC (India) and ABC (UK) are related parties or associated enterprises while XYZ is an independent enterprise. It is expected that the prices at which ABC (India) deals with ABC (UK) are expected to be at par with the price at which it deals with XYZ i.e. the fact that ABC(India) and ABC(UK) are related parties should not have any influence on the price at which transfers take place between them.

Transfer Pricing is swiftly becoming one of the most important areas of international taxation and even for general taxation; primarily because of the volume of additions faced by the tax entity. It is important mainly because for the increasing volume of cross border transactions; making it one of the most lucrative areas for additions by income tax authorities.

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