CBDT Notifies Tolerance Range Of 1% For Wholesale Trading, 3% In All Other Cases For Assessment Year 2023-2024

The Central Board Of Direct Taxes (CBDT) has notified the tolerance range of 1% for wholesale trading and 3% in all other cases for the assessment year 2023-2024.

“The Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C of the said Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent. of the latter in respect of wholesale trading and three percent. of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for the assessment year 2023-2024,” the notification read.

The term “wholesale trading” means an international transaction or specified domestic transaction of trading in goods, which fulfills the two conditions. Firstly, the purchase cost of finished goods is eighty percent or more of the total cost pertaining to such trading activities. Secondly, the average monthly closing inventory of such goods is ten percent. or less of sales pertaining to such trading activities.

Notification No. 46/2023

Date: 26/06/2023

Click Here To Read The Notification