Transfer pricing and related parties

This query is : Resolved

Deepthi Srivastava (Querist)
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23 August 2014 An Indian Company is an importer and marketer of goods manufactured by a company in Srilanka.

One of the promoter-Directors of the Indian Company intends to join the board of the Srilankan Manufacturer Company.

One of the fellow CAs has opined that the Customs Act on transfer Pricing does not allow a producer in Srilanka and Marketing Company in India to have related promoters.

Can you please clarify and throw some light on this topic? Kindly suggest related readings of particular sections of the Act.

Also, if there is any such restriction, what can be an alternate route.

Regards,
Deepthi

ASHOKKUMARSAINI

ASHOKKUMARSAINI (Expert)
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14 September 2014 As per custom law if supplier and importer is related than you have to satisfy custom department that you relation not going to effect the price. If it is than you have to obtain permission from SVB (special valuation branch) cell that your relation is not effecting the price. you can import from Srilanka in every case.
ashok_saini@rediffmail.com

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