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Intermediate

Case Study: Transfer Pricing Dispute Between an Indian Subsidiary and Its Parent

Follow an illustrative Indian subsidiary of a foreign parent through a full transfer pricing dispute, from the pricing decisions that started it to the audit, the adjustment, the appeals and the settlement. Along the way, learn India's arm's length rules under Sections 92 to 92F of the Income-tax Act, how Form 3CEB and TP documentation work, how a Transfer Pricing Officer benchmarks your margins against comparables, and why royalty, management fees, marketing spend and share issues to the parent are the most fought-over items. The case is anchored in real Indian rulings including Maruti Suzuki, LG Electronics, Sony Ericsson, Vodafone India and Shell India, and ends with a practical playbook covering APAs, safe harbour and documentation discipline for CFOs and founders.

Arm's Length PrincipleForm 3CEB and TP DocumentationTransfer Pricing MethodsBenchmarking and ComparablesRoyalty and Management FeesAMP AdjustmentsDRP and ITAT AppealsAdvance Pricing AgreementsSafe Harbour RulesSecondary Adjustment

MODULES

5

DURATION

~2.5 hrs

TRACK

Corporate Finance

What You'll Master

Explain the arm's length principle and when India's transfer pricing rules apply to a subsidiary

Read a Form 3CEB and understand what TP documentation must prove

Follow how a Transfer Pricing Officer selects comparables and computes an adjustment

Recognise why royalty, management fees, AMP spend and share issues attract disputes

Map the appeals route from DRP to ITAT to High Court and estimate the time and cash involved

Weigh APAs, MAP and safe harbour as tools to prevent the next dispute

Access Level

LEARNER

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Everything included

Full Text Playbooks

Actionable Exercises

Mobile Reading Mode

Lifetime Updates

Curriculum Breakdown

Chapter 1: Setting the Scene

2 Lessons

Why Transfer Pricing Exists: Arm's Length and India's Rules11 min read

Meet the Case: The Subsidiary, the Parent and Three Intercompany Flows10 min read

Chapter 2: How the Dispute Began

3 Lessons

The Paper Trail: Form 3CEB, Documentation and Choosing a Method13 min read

The Audit: How a Transfer Pricing Officer Reviews the Case12 min read

The Adjustment: Comparables, Benchmarking and the Rupee Hit14 min read

Chapter 3: The Contested Issues

3 Lessons

Royalty and Management Fees: Proving the Subsidiary Got Something for Them13 min read

Marketing Spend That Builds the Parent's Brand: Maruti, LG and Sony Ericsson14 min read

Shares Issued to the Parent: What Vodafone and Shell Established12 min read

Chapter 4: Resolution Routes

3 Lessons

The Appeals Ladder: DRP, ITAT and High Court12 min read

APAs, MAP and Safe Harbour: Preventing the Next Dispute13 min read

Secondary Adjustment, Interest and Penalties: The Real Cash Cost12 min read

Chapter 5: Lessons for CFOs and Founders

1 Lessons

A Transfer Pricing Playbook for Indian Subsidiaries11 min read