CBDT resolves 180 tax disputes worth Rs 5,000 cr under MAP in last two years

The Central Board of Direct Taxes (CBDT) in about two years since April 1, 2014 has resolved 180 disputes with foreign companies in various sectors through a Mutual Agreement Procedure (MAP). The total amount of income locked-up in dispute in these cases is approximately Rs. 5,000 crore. The resolved cases pertain to various sectors of the economy like software services, IT enabled services, manufacturing and consultancy services, etc. The countries with which cases have been resolved are USA, Japan, United Kingdom and China.

MAP is a mechanism under the double taxation avoidance agreement (DTAA), or tax treaties signed by India with various countries, through which international tax disputes are resolved. CBDT has said that in the last two years, increased focus on MAP has resulted in resolution of large number of disputes relating to double taxation.

MAP has provided comfort to foreign investors and also reduced the number of cases under litigation. In order to encourage foreign investment this is one of the actions taken by CBDT to ensure a fair and judicious dispute resolution regime.  The MAP programme is led by one or more competent authorities designated by the signatory countries to resolve tax disputes under the provisions of each treaty.