Transfer Pricing in Andaman and Nicobar Islands

Transfer Pricing Practice in Andaman and Nicobar Islands — Local TP Charge & Industry Profile

For taxpayers in Andaman and Nicobar Islands with international transactions or specified domestic transactions exceeding the Section 92BA / 92E thresholds, the operational TP touchpoints are: TPO Kolkata (assessing TPO charge), ITAT Kolkata (appellate forum), and the AD-bank reporting loop — typically SBI Port Blair is the principal AD-I; complex FEMA filings funnel via Kolkata or Chennai. The Andaman and Nicobar Islands GSTIN state-code is 35, which becomes relevant for the Form 3CEB cross-reference of intra-group services and royalty flows.

The economic mix of Andaman and Nicobar Islands runs across tourism, small-scale agro-processing, fisheries — sectors that consistently dominate the regulatory case-load and the profile of the engagements we field from this jurisdiction. There is no notified SEZ in the state. On the AD-Bank side, SBI Port Blair is the principal AD-I; complex FEMA filings funnel via Kolkata or Chennai.

A&N enjoys 100% income-tax exemption for indigenous-tribal members under Section 10(26AAA) and is the only Indian UT astride the strategic Malacca Strait shipping route — a niche advantage for marine-services ventures.

Industry-Specific TP Methodology — Andaman and Nicobar Islands Sector Profile

For fisheries and coconut & arecanut taxpayers, the methodology choice typically routes through TNMM (Transactional Net Margin Method) on a value-add net-cost-plus or operating-margin basis, with comparable selection drawn from the Capitaline / Prowess databases filtered for Andaman and Nicobar Islands-region operating subsidiaries where the comparable population permits. For royalty and intra-group services, the CUP method remains the preferred starting point but in practice is rarely defensible without third-party benchmarking — TNMM with a controlled-versus-uncontrolled margin segregation is the common fallback. Form 3CEB disclosures must explicitly identify the chosen MAM (Most Appropriate Method) and the rejection rationale for the others under Rule 10C.

Common ITAT Kolkata TP Adjustment Patterns

Recurring adjustment themes in ITAT Kolkata TP appeals from our practice: (a) inappropriate comparable selection — particularly where the TPO substitutes a comparable set with smaller / loss-making companies excluded under different functional-comparability filters; (b) mis-characterisation of the Indian entity (entrepreneur-vs-routine — a frequent pitfall in software-services and contract-manufacturing models common to Andaman and Nicobar Islands); (c) treatment of forex gains/losses as operating versus non-operating; (d) AMP (Advertising-Marketing-Promotion) and brand-building expense disallowance / mark-up imputation. Our documentation strategy addresses each of these in the master-file and local-file structure under Section 92D.

SDT (Specified Domestic Transactions) and Safe Harbour Considerations

For Andaman and Nicobar Islands-based taxpayers, SDT compliance under Section 92BA arises principally where there are inter-unit transfers between SEZ/non-SEZ units or 80-IA / 80-IB / 80-IC eligible undertakings; the state has no notified SEZ, so the SEZ limb does not arise. The Safe Harbour Rules under Rule 10TD provide a mark-up-based safe harbour for IT-services, ITES, KPO, contract-R&D, and intra-group financial services — particularly attractive for Andaman and Nicobar Islands-based service exporters where the chosen mark-up (17-24% depending on threshold) is acceptable to management.

Engagement — Andaman and Nicobar Islands Coverage

Virtual Auditor's TP practice covers: TP study and Form 3CEB for Andaman and Nicobar Islands-based taxpayers, master-file and CbCR support, APA filings, TPO assessment representation, CIT(A) and ITAT representation under ITAT Kolkata, and benchmarking of transactions across services, royalties, IP licensing, intra-group financing, and contract manufacturing. CA V. Viswanathan (FCA, ACS, CFE, IBBI/RV/03/2019/12333) leads engagements with named-partner ownership and full documentation discipline that withstands scrutiny at ITAT Kolkata and beyond. Free 30-minute consultation: +91 99622 60333.

Andaman & Nicobar Islands: compliance facts for transfer pricing services

The Andaman and Nicobar Islands have a tourism, fisheries and government-services economy centred on Port Blair, with special incentives for island industries and a small base of hospitality and shipping companies. Company matters are routed through Chennai and Kolkata: the Calcutta High Court's Port Blair circuit bench hears writs, and NCLT and ITAT matters go to Kolkata. For transfer pricing services this means the Transfer Pricing Officer under the Pr. CCIT West Bengal & Sikkim (Kolkata) charge tests the benchmarking, with appeals to the ITAT Kolkata.

Which authorities handle transfer pricing services for a business in Andaman & Nicobar Islands?

Andaman & Nicobar Islands companies file with ROC Chennai; writ remedies lie before the Calcutta High Court (Port Blair Circuit Bench); tax appeals go to the ITAT Kolkata.

Statutory references for this service are on the national transfer pricing services page: https://virtualauditor.in/transfer-pricing

Checked 2026-10-14 against MCA · NCLT · CBIC · ITAT.

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