CBDT enhances threshold limit from Rs. 5,500 crore to Rs. 6,400 crore for CbCR

 

 

Notification No. 31/2021, dated 05-04-2021

 

Every MNE group which has a constituent entity resident in India is mandated to notify the Income-tax Department its parent entity and alternate reporting entity and the countries where such entities are resident. Such parent entity or alternate reporting entity is required to furnish a report called ‘Country-by-Country Report’ (CbCR) specifying certain information.

For this purpose, the Central Board of Direct Taxes (CBDT) had notified Rules 10DA, 10DB and Form Nos. 3CEAA to 3CEAE in Income-tax Rules, 1962. Rule 10DA provides that every person of a constituent entity of an international group, shall keep and maintain information and document in respect of an international group and furnish report in Form 3CEAA. Whereas Rule 10DB provides for furnishing of CbCR if the total consolidated group revenue of the international group is Rs. 5,500 crore.

The CBDT vide Income-tax (9th Amendment) Rules, 2021 has amended Rule 10DA, 10DB and Form no. 3CEAB.

Rule 10DA has been amended to provide that Form 3CEAA shall be furnished to Joint Director instead of Joint Commissioner. Rule 10DA(4) further allows furnishing of Form no. 3CEAA by any one constituent entity (subject to conditions) if there are more than one constituent entities which are resident in India of an international group. Sub-rule (4) to Rule 10DA has been amended to remove residency condition for constituent entity. Corresponding amendment has been made in Form No. 3CEAB as well.

The threshold limit for applicability of CbCR has been specified under Rule 10DB. Furnishing of CbCR is mandatory if the consolidated group revenue of the international group is Rs. 5,500 crores in the preceding year. Said threshold limit has been increased