Form 3CEB – An Overview
Mostly, many of us would be conversant only about the audit forms such as 3CA, 3CB and 3CD. However, there is yet another important form to be submitted to the income tax authorities by the assessee, which is Form 3CEB.
Form 3CEB has to be submitted in context of transfer pricing. As per the Income tax Act, 1961, transactions between related parties (or termed as associated enterprises) has to be at arm’s length price (at par with the market price). Form 3CEB is the report submitted by a Chartered Accountant (including those who are entitled to be appointed as auditor) certifying that:-
- The transactions entered by an assessee with its related parties or associated enterprises are at arm’s length
- Prescribed methods had been used for ascertaining the arm’s length price of international and domestic transactions entered by assessee, in relation to transfer pricing
- Proper information and documents have been kept by the assessee for international or domestic transactions which attracts provisions of transfer pricing
Every assessee who is covered under the ambit of transfer pricing has to submit this form for a particular year within 30th of November of next year. So, for the financial year 2015-16, Form 3CEB has to be submitted within 30th November, 2016.
Form 3CEB consists of 3 parts namely:
- Part A – General information about the assessee
- Part B – Details relating to international transactions
- Part C – Details relating to specified domestic transactions (Domestic transfer pricing covers only the expenditure and not the income earned by the assessee, hence, it is said specified domestic transactions and not all domestic transactions)
GENERAL INFORMATION ABOUT THE ASSESSEE
- Name, address and PAN of the assessee
- Nature of business and status of assessee
- Financial year and assessment year for which the form is submitted
- Aggregate value of international and specified domestic transactions
DETAILS RELATING TO INTERNATIONAL TRANSACTIONS
- Details of the associated enterprises including their relationship with the assessee and nature of business of such enterprise
- Details of the following international transactions along with the name and address of associated enterprise, description about the transaction, method used for determining arm’s length price, amount as per books of accounts and arm’s length price amount:
- Transactions in tangible property such as purchase or sale of raw material, consumables or any other supplies for assembling, processing, manufacturing of goods and articles
- Purchase or sale of traded or finished goods
- Purchase, sale, transfer, lease or use of any other tangible movable or immovable property not covered above
- Transactions in intangible property such as purchase, sale, transfer, lease or use of any intangible property
- Providing financial, administrative, technical or commercial services, etc.
- Granting or receiving loans and advances in any form
- Transactions in the nature of guarantee.
- Purchase or sale of marketable securities, issue and buy back of equity shares, optionally convertible or partially convertible or compulsorily convertible debentures or preference shares
- Transaction of entering in mutual agreement or arrangement for the allocation or apportionment of or any contribution to any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises
- Transactions of business restructuring or reorganizations
- Transactions having a bearing on the profits, income, losses or assets of the assessee
- Transactions entered by assessee with a person other than associated enterprises in pursuance of a prior agreement in relation to relevant transaction between such other person and the associated enterprise.
DETAILS RELATING TO SPECIFIED DOMESTIC TRANSACTIONS
- Details of the related parties including their relationship with the assessee and nature of business of such related parties
- Details of the following specified domestic transactions along with the name of associated enterprises, description about the transaction, method used for determining arm’s length price, amount as per books of accounts and arm’s length price amount:
- Expenditure in respect of which payment has been made or to be made to any person referred to any of the prescribed related parties
- Transactions in the nature of transfer or acquisition of any goods or services by tax holiday undertakings of assessee to another business or undertaking of the assessee
- Transactions which has resulted in more than ordinary profits to tax holiday undertakings