#Transfer Pricing - Computation of arm s length price - Notified tolerable limit for determination of ALP NOTIFICATION 45/2014 As per the notification where the variation between the arms length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent of the latter in respect of wholesale trading and three percent of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arms length price for assessment year 2014-15. Explanation. For the purposes of this notification, wholesale trading means an international transaction or specified domestic transaction of trading in goods, which fulfils the following conditions, namely:- (i) purchase cost of finished goods is eighty percent or more of the total cost pertaining to such trading activities; and (ii) average monthly closing inventory of such goods is ten percent or less of sales pertaining to such trading activities.
Posted on: Tue, 07 Oct 2014 04:30:01 +0000