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Form 3CEB, as per transfer pricing regulations, is essentially completed by the company along with Form 3CD under sections 92A to 92F of the Income Tax Act. These sections are primarily related to Transfer Pricing. Filing Form 3CEB becomes mandatory for companies involved in international and specified domestic transactions with any associate enterprise. Form 3CEB provides comprehensive details of all international transactions and specified domestic transactions with associated enterprises.
An international transaction happens between businesses that are connected (associated enterprises) when at least one of the businesses is located in another country (non-resident). These transactions can involve:
International transactions can also include situations where connected businesses agree on how to share the costs of things they do together, such as developing a new product or advertising in a new market.
Transactions between associated businesses within India can be classified as specified domestic transactions if they meet certain criteria. These criteria are:
Note: If a transaction is classified as a specified domestic transaction, it becomes subject to compliance requirements similar to international transactions.
Transfer pricing denotes the price at which one business or division charges its associated business or division for the goods or services rendered.
Form 3CEB ensures that these intercompany transfers adhere to fair market prices, thus preventing manipulation for profit shifting and tax fraud. Essentially, Form 3CEB serves as a means to demonstrate to the Indian government that your company has appropriately priced goods and services involved in cross-entity transfers.
The due date for filing Form 3CEB for the assessment year 2024-25 is 31 October. This applies to companies mandated to provide a report under Section 92A of the Income Tax Act.
Form 3CEB is applicable to companies involved in international and specified domestic transactions with any allied enterprise. Regardless of the value of international transactions, businesses are required to file this form. However, for domestic transactions, filing is mandated only if the value exceeds Rs. 20 crore in a fiscal year.
An exhaustive report from an independent chartered accountant is essential for all businesses engaging in such transactions.
Transfer pricing refers to the fee charged by one business to its associated business for the goods and services provided. Form 3CEB adheres to two conditions outlined by transfer pricing regulations:
Here is how Form 3CEB is filed online:
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Failure to file the Chartered Accountant (CA) report as per Section 92E incurs a penalty of Rs. 1,00,000 for entities.
Every entity that has entered into an international transaction or a specified domestic transaction is required to obtain and furnish an audit report from a chartered accountant in Form 3CEB.
The form uploaded by the Chartered Accountant (CA) will be accessible under the "For your action" tab in the Taxpayer's Worklist. The taxpayer has the option to either approve or reject Form 3CEB. Upon the taxpayer's approval and verification of the form, the filing process is deemed completed.
