29 April 2009
As a Statutory Auditor, how do I convince myself that my client has entered in to transactions at a fair value with a related party? To be more specific, my client has imported Capital Goods and Spares from Related Parties abroad but the imported value seems to be high as similar products are available at cheaper rates in India. What document should I ask my client other than Bill of Entry from Customs to satisfy myself that it is imported at fair value?
30 April 2009
You must ask your client to provide the comparable uncontrolled prices (CUP) of the similar products. The CUP is the price which is entered between two unrelated parties for the similar products in international market. However this is more relevant from income tax perspective, this will give you a good inside for the fair market value of the product and also help at the time of issuing accountant report in form no 3CEB
I did as adviced by you but my Client is unable to procure CUP of similar products between two URP. In turn, the Company asks me where and how they can get this information of CUP between URP.
CAclubindia
