Safe harbour for eligible specified domestic transaction

Acceptance (sub-rule 1). The declared transfer price is accepted if the option is treated as validly exercised under rule 98 and the circumstances in the Table (sub-rule 2) are met.

The circumstances (sub-rule 2).

• Electricity (supply, transmission or wheeling): the tariff is determined, or the methodology for determining it is approved, by the Appropriate Commission in accordance with the Electricity Act, 2003.
• Milk or milk products (purchase): the price is set at a rate fixed on the quality of the milk — its fat content and Solid Not Fat (SNF) content — and (a) the rate does not depend on the quantity of milk procured, the percentage of shares the member holds in the society, or the member's voting power in the society; and (b) the rates are routinely declared by the society in a transparent manner and are available in the public domain.

Effect (sub-rules 3 and 4). No comparability adjustment or allowance under section 165(3)(a)(ii) is made to a transfer price accepted under sub-rule (1). Sections 171 and 172 still apply to a specified domestic transaction even if the safe harbour is chosen.