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The Bangalore bench of the Earnings Tax Appellate Tribunal (ITAT) has granted aid to Toyota Kirloskar Motor on switch pricing adjustment regarding royalty funds made to Toyota Motor Company, Japan, and Toyota Motor Asia Pacific, Singapore.
Nevertheless, in a verdict final month, the appellate physique dismissed Toyota Kirloskar’s enchantment towards the fee of dividend distribution tax (DDT) utilizing the India-Japan Double Taxation Avoidance Settlement (DTAA). The appellate physique permitted the corporate’s royalty fee of ₹646 crore at 6% of native worth addition and rejected the switch pricing officer’s estimate of ₹437 crore at 2.62% of internet gross sales. Furthermore, it additionally upheld Toyota Kirloskar’s methodology of mixing all its worldwide transactions to find out the arm’s size worth for the royalty fee.
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