INDIA Trends and Developments Contributed by: Mukesh Butani, Seema Kejriwal, Pranoy Goswami and Mansi Mathur, BMR Legal
government must remain committed to increase the efficacy of the programme further. Today, India has an inventory of over 800 pending APA applications. Mutual Agreement Procedure (MAP) The average time needed to close transfer pric - ing MAP applications in India stands at 35.78 months for cases started after 1 January 2016 (as of 31 December 2024 – OECD Report). The number of MAP cases closed in 2023 is substantially more than the number of new MAP applications invoked. As a result, the total number of MAPs in India’s inventory is gradually reducing. The MAP closing inventory for transfer pricing cases has gone down from 562 for FY 2022 to 524 for FY 2023. This has been attrib - uted to the maturing of India’s relationships with treaty partners and efforts to increase frequency of communication with its treaty partners. India’s response to Amount B The OECD/G20 Inclusive Framework on BEPS released a report on Amount B of Pillar One on 19 February 2025 to explicate a simplified and streamlined (S&S) pricing framework that deter - mines a return on sales for eligible distributors undertaking baseline marketing and distribution activities. The framework, while envisioned as being friendly towards taxpayers and compli - ance administrators, has been criticised due to a lack of definitive edge on key terms and cracks in the methodology being employed. India has expressly recorded its reservations on the incomplete nature of the OECD/G20 Inclu - sive Framework report on Amount B and its dis - satisfaction is identified in five points:
• the non-inclusion of “low-capacity jurisdic- tions” and “qualifying jurisdictions” in its definition clause; • use of operating expense as a cross-check mechanism to determine the minimum/maxi - mum return of the distributors under Amount B, as against distributors’ functional contri - bution being reflected in the sales made by it, which most developing jurisdictions have been propounding for; • evident lack of geographical market consid - erations and qualitative screening criteria through the report; • technical design of the pricing methodology employed; and • the quandary around base-line distributors in scope of Amount B. India’s proposal to the UN India continues to remain actively engaged with the UN. India had proposed the following work - streams to the UN. • Nexus rule beyond physical presence – to review Articles 5 and 7. • Revised rules to tax income from services. • Revisit existing rules to tax income of remote/ mobile workers. • Developing rules to address taxability of “stateless” individuals. • Fostering synergies in domestic tax policies amongst interested member states. • Standardisation of ALP and development of benchmarks. • Strengthening rules for taxing Offshore Indi - rect Transfers – attempting global consensus. India is a notable supporter of the UN Frame - work Convention on International Tax Co-opera - tion, which envisages providing adequate space for equitable dialogue between developing and developed nations. Recently, the UN Committee
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