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'India must enact transfer pricing law at the earliest'

India would be severely disadvantaged if it were to delay a transfer pricing legislation, management consultant KPMG has said.

KPMG has organised a seminar in New Delhi on transfer pricing to familiarise multi-national corporations operating in India, information technology companies and Indian companies having subsidiaries abroad. Global Transfer Pricing Services Group senior partner Stephen Breckenridge said India should urgently formulate a comprehensive policy on transfer pricing and related cross-border issues.

''India would be severely disadvantaged if it does not give top priority status to such a legislation. It should institute an electronics-based transfer pricing enforcement mechanism in accordance with its unique position as a global information technology superpower,'' he said, addressing representatives of corporate companies like Nestle, Motorola, HCL and Fujitsu among others.

Sudhir Kapadia, one of the faculty members, said unlike income-tax laws of other countries which described in detail provisions to deal with issues of transfer pricing, the Indian income tax law lacked such provisions.

''Section 92 of the Indian Income Tax Act 1962, which is related to transfer pricing, remains unchanged since the 1922 Act. Obviously, it is not equipped to address these issues.''

Another speaker said the companies concerned should prepare detailed documentation in order to be in a state of preparedness when the legislation comes through.

UNI

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