Notification No. 46/2023-Income-Tax notifies the deemed arm’s length price for assessment year 2023-2024. The notification introduces a tolerance range for wholesale trading and other cases in international transactions or specified domestic transactions. In the case of wholesale trading, the tolerance range is set at one percent, while for all other cases, it is set at three percent. The deemed arm’s length price will be applicable for assessment year 2023-2024. The explanatory memorandum assures that the retrospective effect of the notification will not adversely affect anyone.
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi
Notification No. 46/2023-Income-Tax | Dated: 26th June, 2023
S.O. 2777(E).—In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961)(hereafter referred to as the said Act) read with proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C of the said Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one per cent. of the latter in respect of wholesale trading and three per cent. 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 arm’s length price for assessment year 2023-2024.
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 per cent. or more of the total cost pertaining to such trading activities; and
(ii) average monthly closing inventory of such goods is ten per cent. or less of sales pertaining to such trading activities.
[Notification No. 46/2023/F. No. 500/1/2014-APA-II]
Dr. VIJIT PATEL, Under Secy.
Explanatory Memorandum
The notification provides for tolerance range of one per cent. for wholesale trading and three per cent. in all other cases for assessment year 2023-2024. It is certified that none will be adversely affected by the retrospective effect being given to the notification.
