Form 3CEB: Meaning & Who Needs to File It

Form 3CEB under transfer pricing regulations is basically filled by the company with form 3CD under sec 92A TO 92F of the income tax act. These sections are basically related to Transfer Pricing, Form 3 CEB filing is mandatory if the company is engaged in any of the international transaction with any associate enterprise. In form 3CEB basically, you need to give a detail of all the international transactions and some specified domestic transactions with associated enterprises. There are two preconditions of form 3CEB filing under Transfer Pricing Regulation.

Preconditions of Transfer Pricing Regulation (Form 3CEB) in India

• Two or more associated enterprises enter into an international transaction
• Specified Domestic Transaction (w.e.f. AY 2013-14)

International Transaction

International transaction means a transaction between two or more Associated Enterprises, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money or any other transaction having a bearing on the profits, income, losses or assets of such enterprises and shall include a mutual agreement or arrangement between two or more Associated Enterprises 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, facility provided or to be provided to any one or more of such enterprises.

Specified Domestic Transaction

Following are the specified conditions that are required to classify transactions as specified domestic transactions:

• The transaction should not be an international transaction.
• The transaction should be covered under section 92BA.
• The aggregate of such transactions entered into by the taxpayer should exceed the threshold limit of INR 20 cores (from assessment year 2016-17).

As per the provisions of the Act, once a transaction falls under Specified Domestic Transaction, all the compliance requirements relating to transfer pricing documentation, accountant’s report, etc. shall apply to it in the same manner as they apply for international transactions.

Suggested Read: All about Transfer Pricing at Arm’s length in India

Who should file Form 3CEB?

Every person who has entered into an international transaction or specified domestic transactions during the previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed. 

That means If a company is engaged in any of the international transactions and certain specified domestic transactions with any associate enterprise, the company needs to file form 3CEB under transfer pricing regulations in India.

Since, these provisions are also applicable to ‘every person,’ which includes foreign companies as well, the provisions are equally applicable to foreign entities having international transactions with their associated enterprise. 

Information required to file Form 3CEB

Part A: Requires the taxpayer to provide general information about itself along with the aggregate value of international transactions and SDT.

Part B: Requires the taxpayer to provide the details of the international transactions entered into during the Financial Year.

Part C: Requires the taxpayer to provide the details of Specific Domestic Transactions entered into during the FY.

The due date for filing the form 3-CEB

The due date for filing a report pertaining to international and/or specified domestic transactions in Form 3CEB is 30th November.

Penalty for non-filing the Form 3-CEB

• On Failure to furnish report under Form 3CEB Minimum penalty of INR 100,000 may be imposed. 
• While if you fail to furnish information or documents pertaining to international transactions or specified domestic transactions under section 92D, a Penalty equivalent to 2% of the value of the transaction may be imposed.
• If you fail to keep and maintain information and document, failure to report or furnish inaccurate information- Penalty equivalent to 2% of the value of the transaction may be imposed.

Get in touch with Ebizfiling.com for getting the best assistance in filing Form 3CEB, Form FC-GPR & FC-TRS. Call on +91 9643203209 or email us at info@ebizfiling.com.

Also Read: All about Safe Harbor rule in India