Resale Price Method (RPM) is appropriate for:
ADistribution/reselling without significant value addition
BManufacturing
CService contracts
DIntangible transfers (per relevant Section) (per relevant Section)
Answer & Solution
Correct answer: A. Distribution/reselling without significant value addition
1. RPM computes ALP by deducting appropriate gross margin from resale price.
2. Best suited for distribution/reselling activities without significant value addition.
3. Gross margin should reflect comparable functional risk profile.
_Source: ICAI BoS CA Final Paper 7, Ch 24 "Transfer Pricing"_
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