« Top Headlines » Open DEMAT Account in 24 hrs  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal  How To Save Tax For Salary Above 15 Lakhs? «  A job half done... CPM backs phaseout of PNs, tax sops for NRIs... » Taxman calls on global auto firms September, 05th 2006 I-T dept says Toyota, Suzuki violating transfer pricing norms. Transfer pricing has emerged as a bone of contention between the income-tax department and global automobile majors operating in India. According to official sources, the I-T department has asked Japanese auto major Toyota to pay around Rs 190 crore. Another demand of around Rs 150 crore has been made on Suzuki. These demands were raised in March 2006 for the 2003-04 assessment year, sources said. The department is of the view that auto components imported by Indian subsidiaries from their parent are not priced according to the arms length pricing norms, thus violating rules. Transfer pricing is the method by which the goods imported or loans extended by foreign companies to their Indian subsidiaries or vice versa are priced. The I-T department is concerned that the margins earned by these companies are not comparable with their peers in the industry. A faxed query to Toyota Kirloskar Motors, the Indian subsidiary of Toyota, did not elicit any response. Meanwhile, the official spokesperson from Maruti Suzuki India said Maruti had appealed to the income tax commissioner in this regard. As the matter is subjudice, the company did not comment. The matter assumes significance as the Central Board of Direct Taxes is considering a proposal to revise the pricing norms. The proposal says that industries earning a margin of 5 per cent or less than the arms length price should be linked to the profitability of the industry and not the margin. This is significant as the transfer pricing norms specify that if the margin varies between 5 per cent of the arms length price, no adjustments can be made. Incidentally, most auto companies have margins which are 5 per cent or less.