Who files Form 3CEAB when a group has several Indian entities?
The intimation is how a group tells India which of its Indian constituent entities will file the master file, so it is the designated entity that files it. The requirement arises where a group has more than one Indian constituent entity. With several companies in India, one has to be named, or the question of who was obliged stays open. The choice belongs to the group, but it should follow the facts: the entity with the records, the people and the authority to answer for the document it will file. Naming a dormant company because it is convenient creates a filing obligation in a company with nobody able to discharge it.
Do we need Form 3CEAB if there is only one Indian entity?
Where there is a single Indian constituent entity there is nothing to designate. The intimation exists to allocate the master file obligation between several Indian companies, and a group with one has already answered the question. The point to check is whether the group really has one. Branches, liaison offices and companies acquired partway through a year are the ones that get overlooked, and a further Indian constituent entity appearing in the group's own consolidation is enough to put the designation back in play. Look at the group's structure for the year in question rather than the structure as it stands today.
What happens if no Indian entity is designated?
The designation is a small procedural filing with a real consequence. Without it, the exposure on the master file does not sit with one Indian company: every Indian entity of the group is left facing the filing default rather than one. That is why the intimation matters out of proportion to its size. It converts a group-wide problem into a single identified obligation. Groups that discover this after a due date has passed usually find that each of their Indian companies assumed another was filing. The first piece of work is to establish, from the group's own records, which companies were Indian constituent entities for that year.
Can the group change which entity files the master file?
Yes. The designation is a choice about which Indian constituent entity carries the filing, and groups do change it, usually after a restructuring or when the records move to a different company. What causes trouble is changing it in practice without changing it on the record. The master file is then filed by a company the group never designated, while the intimation in India names someone else. Make the change deliberately, tell India which entity is now designated, and keep the two documents consistent. Where the entity changed partway through a year, be explicit about which year the new designation applies to.
Does a nil tax position remove the 3CEAB requirement?
No. Whether the intimation is required turns on the group's facts, meaning how many Indian constituent entities it has and whether it falls within the master file regime, not on whether any of them owes tax. A loss-making Indian subsidiary is still a constituent entity. This catches groups out because the filing looks like a tax document and is treated as one, so it is skipped in a year where there is nothing to pay. The obligation is decided by facts rather than by tax owing, which is why a nil position does not remove it.
Is Form 3CEAB the same as the master file itself?
No. The intimation is the short filing that designates which Indian entity of a group will file the master file. The master file itself is the substantive document describing the group's global structure, intangibles and financing. They are separate filings with separate work behind them. Groups often prepare the substantive document with care and forget the designation entirely, which is the worse order to get wrong: the missing intimation leaves every Indian entity exposed to the filing default, while the document that was prepared is filed by a company nobody named.
Do I need transfer pricing documentation?
If your company transacts with a related party in another country, in substance yes — the question is how much. Documentation is what shifts the burden: prepared before the filing deadline it evidences that your pricing was set on arm's length terms, and its absence is what turns a pricing adjustment into a penalty in several regimes. Volume of related-party dealings drives whether you need a local file, a master file, or a full benchmarking study. See do I need transfer pricing documentation.
Can you give a plain transfer pricing example?
A Canadian company manufactures at a cost of one hundred and its US subsidiary sells to customers for one hundred and eighty. If the parent invoices the subsidiary at one hundred and ten, most of the margin is taxed in the United States; invoice at one hundred and seventy and most of it is taxed in Canada. Nothing about the business changed — only which treasury collects. That is why the arm's length price, the one unrelated parties would have agreed, is the reference point both authorities use. See our transfer pricing work.
