As companies focus on the country’s biggest indirect tax reform — Goods and Services Tax (GST) — an old ghost of transfer pricing (TP) may come to haunt them in the coming years, warn tax experts.

Transfer price is basically a price charged by a subsidiary or a division of a company to another. The rules suggest that there has to be an ‘arm’s length’ while fixing this price so that it’s not too low or too high than the existing open market prices. Tax officers can question and demand tax in case they suspect that companies are escaping taxes.

Source - https://economictimes.indiatimes.com