Under section 40a2(b)

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Bhumika bharwani

Bhumika bharwani (Querist)

17 January 2015 How tO justify inter co. purchases with regard tO fair market value

Guest

Guest (Expert)

17 January 2015 you can compare with the similar goods traded in the market after adjusting some functional differences..

Mohit Singla

Mohit Singla (Expert)

17 January 2015 To justify the inter company purchases rate,
you can refer the market quotations of that product from another seller.
If the prices are almost resembling then their would be no issue.
If prices are highly fluctuated, then make a "statement of Justification" for the same.
Reasons can be:
1. Product without/low profit margin.
2. Any sort of subsidy or duty drawback.
3. Product without charging overhead cost etc.

Rupesh Jain

Rupesh Jain (Expert)

17 January 2015 you have buy same goods from others.
the you see that bill.
otherwise some item or commodity magazine also published by the trade union then you take the ref of that magazines.

or you produce the PI from any vendor for that items.

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