CBDT and OECD tie up to train Indian tax officers and,
Advance tax must for MAT companies

The guidelines on transfer pricing were introduced in India in Finance Act 2001. The subject matter being complicated, the Central Board of Direct Taxes (CBDT) feels that training of its officers in implementation of the rules would help avoid confusion and gain clarity on the issue.

To ensure smooth implementation of transfer pricing rules, CBDT has tied up with the Organization for Economic Cooperation and Development (OECD) for training of income-tax officials at its academy in Nagpur.

On a separate note, CBDT on November 9, 2001 issued a circular clarifying that those companies liable to pay Minimum Alternative Tax (MAT) under section 115JB of India Income tax Act, 1961 would also be liable to pay advance tax. The new provision of section 115JB provides that if tax payable on total income is less than 7.5 per cent of the book profit, the tax payable under this provision shall be 7.5 per cent of the book profit.

The aforesaid circular is in light of CBDT finding a large number of companies defaulting in making the advance tax payments. The consequence of default in paying advance tax would be that penal provisions of section 234B and 234C would apply, as to laying interest on default or deferment of paying advance tax.

Source: The Economic Times, November 9 & 12, 2001