Section 286(7) — the law in short
What the courts have decided on section 286(7), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Statutory position — s.286(7) with Rule 10DB(6): the country-by-country threshold is six thousand four hundred crore rupees, and it is tested against the consolidated group revenue of the accounting year PRECEDING the reporting accounting year
CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
Our group's consolidated revenue crossed the country-by-country threshold this year but was below it last year. Do we have to file for this year?
No — and the reason is the year the test looks at. Section 286(7) provides that the section does not apply to an international group for an accounting year "if the total consolidated group revenue, as reflected in the consolidated financial statement for the accounting year preceding such accounting year does not exceed the amount, as may be prescribed". The prescribed amount is in Rule 10DB(6), which fixes it at six thousand four hundred crore rupees. So the test is applied to the consolidated group revenue of the year BEFORE the reporting accounting year, not to the reporting accounting year's own revenue. A group whose consolidated revenue was below Rs 6,400 crore in the preceding accounting year is outside s.286 for the year in question however large its revenue becomes in that year; a group that was above it in the preceding year is inside s.286 for the year in question even if its revenue collapses. Rule 10DB(7) supplies the conversion rule where the consolidated revenue is in a foreign currency: the telegraphic transfer buying rate on the last day of the accounting year preceding the accounting year.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.