Section 511 — Furnishing of report in respect of international group

(1) Every constituent entity resident in India, shall, if it is constituent of an
international group, the parent entity of which is not resident in India, notify
the prescribed income-tax authority in the form and manner, on or before such
date, as may be prescribed,—
( a) whether it is the alternate reporting entity of the international group; or
( b) the details of the parent entity or the alternate reporting entity, if any, of
the international group, and the country or territory of which the said
entities are resident.
(2) Every parent entity or the alternate reporting entity, resident in India, shall,
for every reporting accounting year, in respect of the international group of which
it is a constituent, furnish a report, to the prescribed income-tax authority within
twelve months from the end of the said reporting accounting year, in such form and
manner, as may be prescribed.
(3) In sub-sections (2) and (4), the report in respect of an international group shall
include—
( a) the aggregate information in respect of the amount of revenue, profit or
loss before income-tax, amount of income-tax paid, amount of income-tax
accrued, stated capital, accumulated earnings, number of employees and
tangible assets not being cash or cash equivalents, with regard to each
country or territory in which the group operates;
( b) the details of each constituent entity of the group including the country
or territory in which such constituent entity is incorporated or organised
or established and the country or territory where it is resident;
( c) the nature and details of the main business activity or activities of each
constituent entity; and
( d) any other information, as may be prescribed.
(4) A constituent entity of an international group, resident in India, other than the
entity referred to in sub-section (2), shall furnish the report referred to in the said
sub-section, in respect of the international group for a reporting accounting year
within the period, as may be prescribed, if the parent entity is resident of a country
or territory,—
( a) where the parent entity is not obligated to file the report of the nature
referred to in the said sub-section; or
( b) with which India does not have an agreement providing for exchange of
the report of the nature referred to in the said sub-section; or
( c) where there has been a systemic failure of the country or territory and
such failure has been intimated by the prescribed income-tax authority
to such constituent entity.
(5) If there are more than one such constituent entities of the group, resident in
India, the report as mentioned in sub-section (4) shall be furnished by any one
constituent entity, if—
( a) the international group has designated such entity to furnish the report
as per sub-section (2) on behalf of all the constituent entities resident in
India; and
( b) the information has been conveyed in writing on behalf of the group to
the prescribed income-tax authority.
(6) The provisions of sub-sections (4) and (5) shall not apply, if—
( a) an alternate reporting entity of the international group has furnished a
report of the nature referred to in sub-section (2), with the tax authority
of the country or territory in which such entity is resident, on or before
the date specified by that country or territory; and
( b) the following conditions are satisfied:—
( i) the said report is required to be furnished under any law in force
in the said country or territory;
( ii) the said country or territory has entered into an agreement with
India providing for exchange of the said report;
( iii) the prescribed income-tax authority has not conveyed any systemic
failure in respect of the said country or territory to any constituent
entity of the group that is resident in India;
( iv) the said country or territory has been informed in writing by the
constituent entity that it is the alternate reporting entity on behalf
of the international group; and
( v) the prescribed income-tax authority has been informed by the entity
referred to in sub-sections (4) and (5) as per sub-section (1).
(7) The prescribed income-tax authority may, for determining the accuracy of the
report furnished by any reporting entity, issue notice in writing, requiring the entity
to produce such information and document as specified in the notice within thirty
days of the date of receipt of the notice and such period may be extended by up to
an additional thirty days upon application by the entity.
(8) The provisions of this section shall not apply to an international group for an
accounting year, if the total consolidated group revenue, as per the consolidated
financial statement for the accounting year preceding such accounting year, does
not exceed the prescribed amount.
(9) The provisions of this section shall be applied as per such guidelines and subject
to such conditions, as may be prescribed.
(10) For the purposes this section,—
( a) “accounting year” means,—
( i) a tax year, in a case where the parent entity is resident in India; or
( ii) an annual accounting period, with respect to which the parent
entity of the international group prepares its financial statements
under any law in force or the applicable accounting standards of
the country or territory of which such entity is resident, in any
other case;
( b) “agreement” means a combination of all of the following agreements:—
( i) an agreement entered into under section 159(1) or (2); and
( ii) an agreement for exchange of the report referred to in sub-section
(2) and notified by the Central Government;
( c) “alternate reporting entity” means any constituent entity of the interna-
tional group that has been designated by such group, in the place of the
parent entity, to furnish the report of the nature referred to in sub-sec -
tion (2) in the country or territory in which the said constituent entity
is resident on behalf of such group;
( d) “constituent entity” means—
( i) any separate entity of an international group that is included in
the consolidated financial statement of the said group for financial
reporting purposes, or may be so included for the said purpose, if
the equity share of any entity of the international group were to be
listed on a stock exchange;
( ii) any such entity that is excluded from the consolidated financial
statement of the international group solely on the basis of size or
materiality; or
( iii) any permanent establishment of any separate business entity of the
international group included in sub-clause (i) or (ii), if such business
unit prepares a separate financial statement for such permanent
establishment for financial reporting, regulatory, tax reporting or
internal management control purposes;
( e) “group” includes a parent entity and all the entities in respect of which,
for the reason of ownership or control, a consolidated financial statement
for financial reporting purposes—
( i) is required to be prepared under any law in force or the accounting
standards of the country or territory of which the parent entity is
resident; or
( ii) would have been required to be prepared, had the equity shares of
any of the enterprises were listed on a stock exchange in the country
or territory of which the parent entity is resident;
( f) “consolidated financial statement” means the financial statement of an
international group in which the assets, liabilities, income, expenses and
cash flows of the parent entity and the constituent entities are presented
as those of a single economic entity;
( g) “international group” means any group that includes—
( i) two or more enterprises which are resident of different countries
or territories; or
( ii) an enterprise, being a resident of one country or territory, which
carries on any business through a permanent establishment in other
countries or territories;
( h) “parent entity” means a constituent entity, of an international group
holding, directly or indirectly, an interest in one or more of the other
constituent entities of the international group, such that—
( i) it is required to prepare a consolidated financial statement under
any law in force or the accounting standards of the country or
territory of which the entity is resident; or
( ii) it would have been required to prepare a consolidated financial
statement had the equity shares of any of the enterprises were listed
on a stock exchange,
and, there is no other constituent entity of such group which, due to
ownership of any interest, directly or indirectly, in the first mentioned
constituent entity, is required to prepare a consolidated financial state-
ment, under the circumstances referred to in sub-clause ( i) or (ii), that
includes the separate financial statement of the first mentioned constit-
uent entity;
( i) “permanent establishment” shall have the meaning assigned to it in
section 173(c);
( j) “reporting accounting year” means the accounting year in respect of
which the financial and operational results are required to be reflected
in the report referred to in sub-sections (2), (4) and (5);
( k) “reporting entity” means the constituent entity including the parent entity
or the alternate reporting entity, that is required to furnish a report of
the nature referred to in sub-section (2);
( l) “systemic failure” with respect to a country or territory means that the
country or territory has an agreement with India providing for exchange
of report of the nature referred to in sub-section (2), but—
( i) in violation of the said agreement, it has suspended automatic
exchange; or
( ii) has persistently failed to automatically provide to India the report
in its possession in respect of any international group having a
constituent entity resident in India.