Covid-19 pandemic, staff crunch deal blow to pending APA applications

APAs are aimed at providing certainty to taxpayers in respect of the transfer price of the cross-border transactions

The Covid-19 pandemic-led economic disruption and severe manpower crunch in the income-tax (I-T) department have led to a pile up of applications for specific tax agreements that multinational companies (MNCs) have with Indian authorities, dampening the business environment.

According to estimates, the number of pending advance pricing agreement (APA) applications has crossed 750. Several MNCs are seeking modifications, given they are unable to maintain the preset margin. Experts pointed out that the manpower crunch has compounded woes, with a team of four commissioners and four additional commissioners working on APAs.

“We are working towards fast-tracking clearance of APAs. Some cases pertain to