The TP Bomb!

Before the arrival of GAAR, TP topped the list of acronyms most hated by companies. TP or Transfer Pricing regulations were till now applicable only on international transactions between associated enterprises. But this Budget Finance Minister Pranab Mukherjee announced that transfer pricing regulations will apply to domestic transactions of Rs 5 crore and more in value. This is another litigation minefield. Last year international transfer pricing adjustments amounted to Rs 50,000 rupees, equal to the total adjustments made over 6 previous years. So how can Indian companies avoid spending all their profits in court? Sanjay Tolia of PwC and S Gayathri of Essar hopefully have that answer!

Doshi: You described to me the bulk of the transactions that would come under transfer pricing now with the imposition of this new rule and you said in the case of excessive cost i.e. company