What is Advance Pricing Agreement (APA) Programme?

The APA Programme was introduced by Finance Act, 2012 with a view to
provide a predictable and non-adversarial tax regime and to reduce litigation in
Indian transfer pricing arena. Rollback of APAs was announced in the Budget in
July 2014.

An APA is usually signed between taxpayer and central tax authority on an

appropriating transfer pricing methodology for determining the value of assets
and taxes on intra-group overseas transactions.

An APA can be entered into for a maximum of 5 years at a time.