On 25 April 2019, India published Notification No. 37/2019 from the Department of Revenue in an extraordinary version of the Official Gazette. India and USA have signed a Bilateral Competent Authority Agreement and Inter – Governmental Agreement (IGA) for exchange of CBC reports on 27 March 2019. In the absence of the said Bilateral Agreement, the Indian constituent entities (Indian Co.), which are part of an international group situated in USA, were required to file CbC Report in India even though Indian Co. is not the Alternate Reporting Entity or the Parent Co. had filed CBC report in US since USA was not a party to Multilateral Competent Authority Agreement for Exchange of CBC Reports.
Before in April 2019, India provided an extended CbC report deadline of 30 April 2019 for constituent entities in India of U.S. MNEs due to the fact that although an exchange agreement was signed, it was not yet effective (previous coverage). With Notification No. 37/2019, it is assumed that the Indian authorities will not seek local filing of CbC reports by constituent entities of U.S. MNEs.
The Notification No. 37/2019, has notified the Bilateral Agreement with USA. However, in the absence of clear guidance from CBDT, it appears that Indian Co are still liable to file CBC Report locally for reporting accounting periods ending up to 29th April, 2018. It is also not clear from language of the said notification as to whether the internal procedures for the mechanism for exchange of CBC Reports have been completed.
