Amway India Enterprises (P.) Ltd. v. NFAC (2025) 127 ITR 642 (Delhi)(Trib.)

S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Advertisement, Marketing and Promotion (AMP) expenses-Commission to distributors not AMP expenditure-Addition deleted. [S. 92CA]

The Transfer Pricing Officer included commission paid to distributors under the multi-level marketing model as Advertisement, Marketing and Promotion expenditure and made a transfer pricing adjustment. The Tribunal held that distributor commission was directly linked to sales achieved and not to brand promotion. Following the principle of consistency adopted in earlier years, such commission could not be treated as AMP expenditure or an international transaction. The transfer pricing adjustment was deleted. (AY. 2020-21).

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