26 February 2018 Indian tribunal holds AMP expenses part of transaction value declared for customs purposes Transfer pricing aspects of Advertisement, Marketing and Promotion (AMP) expenditures incurred by Indian entities for the sale and marketing of goods using trademarks or brand names owned by a foreign Associated Enterprise (AE) has been a controversial issue with the Indian tax authorities. The Indian tax authorities have often declared that such expenditures incurred by the Indian affiliate is for the benefit of the foreign AE and is therefore a provision of an intra-group service, which needs to be compensated under arm's-length principles, separate from the operating profit earned by the Indian affiliate from the sale of goods. In the recent case of an athletic footwear and apparel company, the Delhi Customs Excise & Service Tax Appellate Tribunal (CESTAT) upheld the addition of AMP expenses to the transaction value declared for customs purposes. Document ID: 2018-0425 |
