Transfer Pricing

Transfer pricing refers to the setting of the price of goods or services sold between entities within an enterprise. For example, if a subsidiary sells good or services to its parent company, then the price set for this sale is the transfer price.

Vodafone Case:
  • Bombay HC ruled in favor of Vodafone setting aside tax demand of 3700 crore.
  • In 2007-08, the call center business of Vodafone was sold to Hutchinson and tax authorities sought capital gain tax
  • Vodafone said the deal was between two domestic firms and transfer pricing authorities had no jurisdiction over the deal
  • Judgement will benefit many global firms such as IMB, Shell, Nokia etc. who are facing similar tax demands by the authorities



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