APA @ 4 - Spectacular Success !
Circa 2012 - SC verdict in Vodafone case in January followed by spate of retrospective amendments in Union Budget in February, trigerring off a backlash from foreign investors. To top it, the TP cycle witnessed an unprecedented $10 bn+ adjustments causing anxiety among many MNC taxpayers. Amidst these flurry of developments, the Presidential elections happened and the then Finance Minister Mr. Pranab Mukherjee was elected the President. In stepped old warhorse Mr. P. Chidambaram for his fourth stint as FM. While he could not undo the retro amendments the blow had to be softened and foreign investors had to be assuaged. It was during this time that we started to hear the buzz of the Advance Pricing Agreements (APA) regime and how the Finance Ministry was trying to put the rollout on fasttrack. I vividly remember calls from many in the tax fraternity who were keenly waiting for the APA notification!
Well the notification arrived on August 31, 2012 and there has been no looking back since.. The stats tell the story - initially the stakeholders from CBDT to taxpayers to APA team felt their way and 9 APAs were signed in the first two years. But last financial year, with the current Govt. too signaling its intent to push this alternate dispute resolution scheme in a big way we saw 55 APAs being signed! That's not all - an ambitious target of 120-150 APAs has been set for current year and if the same is achieved we will not only cross USA in the no. of APAs signed in a year but also have more APA closings than the no. of fresh applications filed. Quite unheard of in the APA world!
The Govt. , CBDT and the APA team deserve a big hand for making this scheme the success that it has become and re-building the confidence among MNC assessees. As the APA regime completes 4 years, one hopes that the Govt./CBDT further strengthens the APA team to meet the stiff targets it has set for itself. As for now, they can proudly say - 'Mission Accomplished.'