Union Government has received Rs. 3,000 crore of additional tax from MNCs that have entered into advance pricing agreements (APAs) with it over last five years and also has eliminated big source of tax litigation.

• APAs are primarily aimed at avoiding transfer pricing disputes arising from cross-border transactions undertaken by MNCs. 
• It was revealed in recently released annual report on advance pricing agreements (APAs) for FY18 by Central Board of Direct Taxes (CBDT).
• Through these agreements, tax department and companies seek to resolve transfer pricing disputes in advance before the cross-border related party transaction actually takes place.
• Its provision was introduced in Income-tax Act, 1961 in 2012 and Rollback provisions to it were introduced in 2014.