Intra-Group Services In Transfer Pricing: Persistent Controversies And The Policy Imperatives For India
- IJLLR Journal
- 2 days ago
- 1 min read
Divya Bharathi M, Research Scholar, School of Law, Vels Institute of Science, Technology and Advanced Studies, Chennai.
Dr. Karthikeyan, School of Law, Vels Institute of Science, Technology and Advanced Studies, Chennai
ABSTRACT
Due to growing multinational enterprise (MNE) operations, intricate centralised business structures, and changing international tax regulations, intra-group services (IGS) are a recurring topic of transfer-pricing (TP) issues in India. Even though the OECD Transfer Pricing Guidelines have made it clearer how IGS—especially low-value-adding services—are treated, India still has a high litigation rate because of conflicting interpretations of benefit tests, documentation requirements, cost allocation keys, AMP-IGS overlaps, and the lack of simplified regulations. The unresolved issues surrounding IGS have important ramifications for both taxpayers and policymakers as India undergoes significant tax reforms in line with BEPS (Base Erosion and Profit Shifting), Pillar Two, GST harmonisation, and digitalized tax administration. This expanded abstract examines reform alternatives that can lessen disputes and bring India's TP framework into line with the changing global tax architecture while also critically analysing the country's current problems and contrasting them with international practices. These changes will improve tax certainty for MNEs doing business in India, limit litigation, and update India's TP framework.
