Determination of Arms Length of Price. Income Tax vs Customs
Transfer pricing analysis, always revolves around the issue of determination of Arms Length Price. Determination of arms length price ensures that there is no tax evasion by the domestic company by artificially fixing the price, which is more suitable to its counterparts situated in lower tax jurisdiction. In the present research paper, the researcher has tried to identify the issues of determination of Arms Length Price keeping in view of two revenue departments of the government, viz., Income tax department as well as customs department. The research is done against the backdrop of OECD guidelines in this regards and attempts to justify that the government should regulate both of its wings in appropriate manner and it is the need of the time that statutes should be amended in such a way that once valuation arrived by one of the authority, it should be binding on the other authority.
