The Central Board of Direct Taxes (CBDT) on 15 June 2017 notified the Rule 10CB for operationalising the provisions of Secondary Adjustment under Section 92CE of Income Tax (IT) Act, 1961.
The provision prescribes the time limit of 90 days for repatriation of excess money. This time limit will begin when the primary adjustments exceeding INR 1 crore made in the year 2017-18 or later, attains finality.
In cases where the transfer pricing order is appealed against by the taxpayer, the time limit for repatriation will begin only after the appeal is finalised by the appellate authority.
The provision also prescribe the rate of interest for computing the income in case of failure to repatriate the excess money within the prescribed time limit.
Separate rates of interest are also prescribed for international transactions denominated in Indian currency and in foreign currency.
The rates of interest are applicable on an annual basis. The Income-tax Act, 1961 was inserted with the section 92CE through Finance Act, 2017.
The provisions of the same will come into effect from 1 April 2018 to provide for secondary adjustment by attributing excess money lying in the hands of the associated enterprise to make the actual allocation of funds.
The provision applies to the primary adjustments exceeding INR 1 crore made in respect of Assessment Year 2017-18 onwards.
