Revenue dept prevented illegal outflow of Rs 66,085 cr: Pranab
Crude prices edged closer to a month-high of $102 a barrel, pushed up by an Iranian ban on exports to six European nations, as well as positive developments in the European debt crisis.
Government's efforts to deal with the menace of black money helped in checking tax evasion as alert revenue officials prevented illegal outflow of over Rs 66,000 crore by MNCs during the last fiscal.
"The Directorate of Transfer Pricing in the Ministry (of Finance) helped in saving Rs 66,085 crore during the last year by timely stopping the illegal transfer of money through transfer pricing," Finance Minister Pranab Mukherjee said at a meeting of Central Direct Taxes Advisory Committee (CDTAC).
Multinational companies use transfer pricing for products and services in cross-border trade between their related entities to shift profits to countries with low tax rates. In the process, countries lose tax revenue.
The Ministry, according to sources, is contemplating introducing Advance Pricing Agreement (APA) mechanism in the upcoming budget to check transfer pricing disputes.
The APA mechanism will allow companies to enter into agreements with the tax authorities to prevent future disputes with regard to pricing of products and services for the purpose of cross-border trade between related entities.
The Finance Minister had earlier assured Parliament that the government would come out with a White Paper on Black Money.
The government, Mukherjee said, has taken several steps to unearth black money and legislative measures to obtain banking information -- through Double Taxation Avoidance Agreements (DTAA) and Tax Information Exchange Agreements (TIEA) -- are being negotiated.
