All About Form 3CEB: Meaning & Who Needs to File It

Introduction

Form 3CEB under transfer pricing regulations is a mandatory compliance requirement for businesses involved in international or specified domestic transactions with associated enterprises. It is filed under Sections 92A to 92F of the Income Tax Act and is closely linked with transfer pricing provisions. Form 3CEB is required to be submitted along with Form 3CD and must be certified by a Chartered Accountant.

The purpose of this form is to disclose detailed information about related party transactions to ensure that such transactions are conducted at arm’s length. Both Indian and foreign companies can be required to file Form 3CEB if they enter into international transactions or specified domestic transactions with associated enterprises. Failure to file or incorrect filing can attract significant penalties under the Income Tax Act.

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 a 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.

What kind of transactions are covered?   

Transactions reported in Form 3CEB include:

• Sale or purchase of goods between related parties

• Payment of management fees or royalties

• Transfer of technology or intellectual property

• Loans, guarantees, or interest payments

• Shared services or cost allocations

The due date for filing the form 3CEB

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 3CEB

• 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 09643203209 or email to us at info@ebizfiling.com.

Also Read: All about Safe Harbor rule in India

How Ebizfiling helps clients with form 3CEB? 

• We first confirm whether Form 3CEB applies to your business or not.

• We review your related party transactions to understand what needs reporting.

• We coordinate with our Chartered Accountant for certification of the form.

• We help you collect the right details without overloading you.

• We file Form 3CEB online and guide you through the approval step.

• We ensure the form is filed on time to avoid penalties.

Conclusion 

Form 3CEB plays a key role in ensuring transparency in transactions between related parties. If a company enters into international transactions or certain high-value domestic transactions with associated enterprises, filing this form becomes mandatory. Many businesses overlook this requirement or misunderstand its scope, which often leads to penalties later.

Understanding whether Form 3CEB applies to your business and filing it correctly on time helps avoid unnecessary scrutiny and compliance risks. With the right guidance, this compliance becomes manageable and stress-free.

Frequently Asked Questions on Form 3CEB