Qualitative Review of Transfer Pricing Disputes in India

Abstract

This is a pilot paper for the thesis. This study analyzes transfer pricing (TP) disputes in India through tribunal and court rulings from 2012–2024, identifying key trends across industries, transaction types, and procedural challenges. Common issues include disputes over methodologies like Transactional Net Margin Method (TNMM) and Comparable Uncontrolled Price (CUP), with adjustments often linked to royalties, corporate guarantees, and management fees. Procedural lapses, such as missed deadlines under Section 92CA(3A) and inadequate compliance with Section 144C, frequently led to quashed assessments or remands.

Sector-specific trends emerged, notably in pharmaceuticals and IT services, where func- tional comparability and interest benchmarks like LIBOR played a critical role. Omitted statutory provisions, such as Clause (i) of Section 92BA, invalidated adjustments in do- mestic TP cases. Documentation gaps in intra-group services and procedural errors, including missing Document Identification Numbers (DIN), further fueled disputes.

The findings highlight the importance of consistent methodologies, robust documenta- tion, and procedural compliance, providing actionable insights for policymakers, busi- nesses, and tax professionals. This qualitative review aims to enhance understanding and predictability in TP litigation in India.