Procedure (advance pricing agreement)

Processing (sub-rules 1 to 4). The team, or the competent authority of India or a representative, processes the application in consultation with the applicant. It may hold meetings, call for additional documents or information, visit the business premises, and make inquiries. For a unilateral agreement the proceedings may, where possible, be completed within one year from the end of the financial year in which the application was allowed to proceed.

Bilateral or multilateral (sub-rules 5 to 7). The competent authority forwards the application to the Principal Chief Commissioner of Income-tax (International Taxation), who assigns it to a team; the team's draft report goes to the competent authority, who also invokes the procedure in rule 122.

Concluding (sub-rules 8 to 10). The authority and the applicant prepare a proposed mutually agreed draft agreement, including the effect of any arrangement under rule 122(5) that the applicant has accepted. The Board enters into the agreement after the Central Government's approval, and a copy goes to the Commissioner having jurisdiction over the assessee.

Closure (sub-rules 11 to 15). If no agreement is entered into within three years from the end of the financial year in which the application was furnished, the Board may, after a reasonable opportunity of being heard, treat the proceedings as closed where the applicant has not provided relevant documents or information, or has failed to comply with directions for meetings, premises visits or inquiries. For a unilateral agreement whose primary covered transaction is information technology services under rule 89(2) [Table: Sl. No. 1], the proceedings are treated as closed if no agreement is entered into within two years from the end of the quarter in which the application is made; the assessee may ask for an additional six months. The fee is not refunded when proceedings are closed.