India: CBDT Notifies The Final Rules For Enhanced Transfer Pricing Documentation - Master File And CbCR

Last Updated: 14 November 2017
Article by SKP  

The Central Board of Direct Taxes (CBDT) had released draft rules for Master File and Country-by-Country Report (CbCR) requirements on 6 October and has requested for comments from the public.

To know more about the provisions in the draft rules,  please click here.

On 31 October, the CBDT notified the final rules laying down the applicability criteria and requirements for maintaining and furnishing the enhanced transfer pricing documentation requirements in the nature of Master File and CbCR. Notably, there were a few suggestions, including a major concern that the threshold of INR 5 billion was quite low for Master File applicability. However, the provisions in the final rules are largely in line with the provisions stipulated in the draft rules.

In this alert, we have summarised a comparison of the key points from the final rules and draft rules for your reference.

  • Quantum-wise threshold: No change vis-a-vis the draft rules.
  • Year of applicability for the threshold of INR 5 billion in case of Master File: Changed from immediately preceding Financial Year (FY) to accounting year.
  • Timelines: Small change on timelines with respect to CbCR reporting for multiple entities.
  • Forms: Form numbers have been changed and have been sequentially aligned.
  • Format of forms: No major change except a new column of 'Administrative, management and support services' as one of the business activities forming part of the form for CbCR (Form 3CEAD), in line with the format prescribed by the Organisation for Economic Cooperation and Development (OECD).
  • Master File: As per the final rules, a list of all entities (along with addresses) in the international group, instead of all the operating entities (as mentioned in draft rules), needs to be maintained in the Master File.  It is important to note that there is no change with respect to the requirement of filing information in Part A of Form 3CEAA by every entity, being a constituent entity of an international group, whether or not the threshold for maintenance of Master File is satisfied.
  • Conversion rate: In order to determine the applicability of the Master File and CbCR threshold limits, the final rules prescribe that the telegraphic transfer buying rate as on the last day of the accounting year for the Master File and the last day of the accounting year preceding the accounting year in the case of CbCR is to be considered for the conversion of foreign currency-denominated consolidated group revenue into INR.

The summarised provisions as per the final rules are:

Applicability of Master File:

Particulars Threshold Data to be considered for FY 2016-17
Consolidated revenue of International Group INR 5 billion Accounting year i.e. FY 2016-17
Aggregate value of international transactions INR 500 million Accounting year i.e. FY 2016-17
Aggregate value of international transactions relating to purchase, sale, transfer lease or use of intangible property INR 100 million Accounting year i.e. FY 2016-17

Applicability of the CbCR:

Particulars Threshold Data to be considered for FY 2016-17
Consolidated revenue of International Group INR 55 billion Preceding accounting year i.e. FY 2015-16

Key forms and timelines:

Master File:

Particulars Form as per the Final Rules Timelines as per the Final Rules
Single constituent entity of the group in India Form No. 3CEAA (Part A & B) For FY 2016-17 – To be filed on or before 31 March 2018
For subsequent years, to be filed on or before the due date for filing of Return of Income (30 November)
Multiple constituent group entities in India Form No. 3CEAB 30 days prior to the date of filing of Master File (for FY 2016-17, the timeline is on or before 1 March 2018)


Particulars Form as per the Final Rules Timelines as per the Final Rules
Intimation of details of parent entity/alternate reporting entity which will file the CbCR Form No. 3CEAC 2 months prior to furnishing the CbCR (instead of 60 days as mentioned in the draft rules)
For FY 2016-17, the due date is 31 January 2018 (refer to the point below)
Filling CbCR - Every parent entity or the alternate reporting entity resident in India Form No. 3CEAD The due date for furnishing the CbCR is on or before the due date for filing of Return of Income for the relevant accounting year.
However, as per Notification No. 26/2017 dated 25 October 2017, the due date for furnishing of the CbCR for FY 2016-17 has been extended to 31 March 2018 by the CBDT.
Intimation of multiple constituent group entities in India Form No. 3CEAE No timeline mentioned in the rules. This needs to be clarified by the CBDT.


From a comprehensive understanding perspective, the penalties prescribed in the Indian Income Tax Act, 1961 with respect to the failure to furnish the enhanced transfer pricing documentation are as follows:

  • Failure to furnish information and documentation under the proposed three-tier documentation structure by the due date will attract a penalty of INR 500,000; and
  • Failure to furnish the CbCR involves the following graded penalties:
Particulars Delay up to one month Delay beyond one  month Delay in payment of penalty even after penalty order
Failure to furnish the CbCR by the due date INR 5,000 per day INR 15,000 per day INR 50,000 per day
Inaccurate information filed under the CbCR INR 500,000

SKP's comments

Now that the rules are finalised and 31 March 2018 - the due date for the first compliance for Master File and CbCR for FY 2016-17 is only four months away, multinational companies operating in India (inbound and outbound) are advised to take following steps in a timely manner: 

  • Determining the applicability of Master File and CbCR related requirements for the Indian entity. 
  • Comply with the intimation requirements within the prescribed timelines. 
  • The Indian headquartered groups, where no work on Master File/CbCR might have been performed within the group, should start collating details required for preparation of the Master File/CbCR.
  • Where the group has already prepared the Master File to comply with the requirements of other countries, align the details as per the Indian Master File requirements.
  • Start collating the CbCR in case the Indian entity is to be considered as an alternate reporting entity for the group or the parent entity is a resident of a country with which India does not have an agreement for the exchange of the CbCR.

Considering the far-reaching implications of this development, we will be conducting a webinar that will discuss these enhanced documentation requirements, its foreseeable effects and a few select strategies that could be useful for multinationals (inbound as well as outbound) to navigate these requirements effectively.

We invite you to join us by registering at the link below. We hope you will find the webinar interesting and useful.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions