GAIL signs advance pricing agreement with CBDT

GAIL (India) Limited has entered into an advance pricing agreement (APA) with the Central Board of Direct Taxes (CBDT) for determining the transfer pricing margin payable on its long-term LNG sourcing contract from the US for a period of five years. GAIL is the first public sector undertaking in the oil and gas sector in India to successfully sign the APA. The APA scheme was launched in 2022 to support the government’s goal of promoting a non-adversarial tax system and improve ease of doing business in India. GAIL currently has two contracts to buy a combined 5.8 mtpa of LNG from the US, comprising around 90 standard-sized cargoes.