What is Form 3CEB?
Form 3CEB under transfer pricing regulations, is basically filled by the company with form 3CD under sec 92A TO 92F of 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 transaction and some specified domestic transactions with associated enterprises. There are two preconditions of form 3CEB filing under Transfer Pricing Regulation.
Form 3CEB follows two conditions as set forth by transfer pricing regulations:
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A transaction between any two or multiple associated businesses, either or both being foreign businesses, is an international transaction; and
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Specified domestic transactions are those connected to transfer pricing but do not include international transactions. (Transfer pricing is the price one company levies on another company for the goods and services it has rendered.)
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 transaction 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.
What are the reporting requirements in Form 3CEB?
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Taxpayers must provide general personal information as well as the aggregate value of the international transactions that have been undertaken;
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Taxpayers must provide information about the international transactions that were undertaken during the financial year calculated as April 1 to March 3; and
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Taxpayers must provide information about the specified domestic transactions that were undertaken during the financial year.
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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.
What is the penalty for incompliance?
Penalties are triggered if the company fails to file Form 3CEB in the expected format. These are:
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Fine of minimum INR 100,000 (approx. US$1,352) if the report is not presented as the required Form 3CEB;
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Fine of two percent of the value of the transaction if the given information on them is inadequate; and
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Fine of two percent of the value of the transaction if the given information on them is incorrect.
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