Form 3CEAC: Intimation under Section 286(1)
CA Amit Bansal
CA Amit Bansal is a Fellow Chartered Accountant with over a decade of experience in accounting, auditing, and advisory. As Partner at GMCS & Co. and Founder of ABVS Management Consultancy, he leads key assurance and compliance projects across industries. He holds ICAI certifications in Forensic Accounting (FAFD), Concurrent Audit of Banks, ADR, and IND AS, and is a certified Peer Reviewer, known for his commitment to audit quality and integrity.
In India’s transfer pricing and international tax regime, Form 3CEAC plays a pivotal role in Country-by-Country (“CbC”) reporting compliance. It serves as a formal notification by a resident constituent entity of an international group, informing the tax authorities of the group’s global reporting arrangements when the parent or alternate reporting entity is located outside India. This requirement is mandated under Section 286(1) of the Income-tax Act, read together with the relevant rules (notably Rule 10DB).
Purpose & Context
The intention behind Form 3CEAC is to ensure that Indian tax authorities are kept informed of how and where the CbC report for the international group will be filed. The CbC report is a global, aggregate disclosure that shows, among other things, the allocation of income, taxes paid, and the volume of certain intercompany transactions by jurisdiction. Through the intimation in Form 3CEAC, the Indian constituent entity declares whether it will act as the “alternate reporting entity” or whether the parent entity (or another designated entity) will file the report in its jurisdiction.
In effect, Form 3CEAC facilitates coordination between India’s transfer pricing oversight mechanisms and the global CbC reporting architecture. It helps avoid duplicative filings, identifies the responsible reporting entity, and provides clarity to Indian tax authorities about which jurisdiction will host the group’s CbC filing.
Applicability
Form 3CEAC must be furnished by a resident constituent entity of an international group if the parent entity of that group is non-resident in India. The key applicability triggers are:
- The group must be subject to CbC reporting (i.e., meet the revenue threshold for an international group).
- The parent entity (or designated reporting entity) lies in a jurisdiction outside India.
- India must have a mechanism for the automatic exchange of CbC reports with that jurisdiction, or a notification of a “systemic failure” must be involved.
In such cases, the Indian constituent entity must intimate via Form 3CEAC whether it has been designated as the alternate reporting entity, or provide details of the parent or alternate reporting entity, along with its country of residence.
When multiple Indian entities belong to the same group, the group should designate one entity (sometimes through a formal declaration) to serve this intimation function on behalf of all Indian constituents.
Key Contents of Form 3CEAC
Although the form is relatively short, it requires precise disclosure of essential information. Key fields typically include:
- Name, address, and PAN of the Indian constituent entity providing the intimation.
- Name of the international group to which this entity belongs.
- Name and address of the parent entity of the international group (if known).
- Country of residence of that parent entity (or alternate reporting entity, if applicable).
- Declaration whether the Indian constituent entity is the alternate reporting entity (i.e., will itself file the CbC report) or not.
- Name & address of alternate reporting entity, if already designated by the group.
This intimation provides Indian tax authorities with visibility into who is responsible for the group’s CbC reporting and in which jurisdiction, thereby facilitating coordination in cross-border tax oversight.
Due Date & Timing
The deadline for filing Form 3CEAC is two months before the due date for furnishing the CbC report (i.e., Form 3CEAD) by the parent or alternate reporting entity. In practical application, this means the Indian constituent must submit Form 3CEAC ahead of the parent’s reporting deadline, so that Indian authorities are timely apprised.
In many years, this has translated into a 31 January deadline for Form 3CEAC, while the corresponding CbC-report filing (Form 3CEAD) may be due by 31 March (i.e., 12 months after the end of the group’s reporting accounting year).
If neither the parent entity nor the alternate reporting entity is resident in India, or if India lacks an automatic exchange mechanism with the parent’s jurisdiction, the CbC report may need to be filed locally, making the Form 3CEAC intimation particularly consequential.
Interplay with Form 3CEAD and Other CbC Obligations
Form 3CEAC is not a substitute for the CbC report itself; instead, it is a preliminary notification. The actual detailed CbC report, when required, is filed via Form 3CEAD under Section 286(2) or (4). The information given in the intimation should be coherent with the later CbC report to avoid inconsistencies.
Further, if India is unable to exchange CbC information with the parent’s jurisdiction (or if there is a “systemic failure” in data exchange by that jurisdiction), the Indian constituent entity might be required to file the CbC report locally. In such a case, the intimation in Form 3CEAC is crucial, as it puts the tax authority on notice about the group’s situation and may compel local reporting under Indian law.
Additionally, when more than one Indian entity is part of the international group, designation of a single entity to send the intimation helps to consolidate communications and avoids multiple filings.
Penalties for Non-Compliance
Failure to furnish Form 3CEAC, or furnishing incorrect or misleading information, can attract penalties under the Income-tax Act. Under section 271GB, penalties for not complying with CbC reporting or related intimation obligations can include:
- A penalty of ₹ 5,000 per day applies for a delay in filing if the delay does not exceed one month.
- If the default continues beyond one month, a higher penalty of ₹ 15,000 per day may apply.
- In addition, more severe daily penalties may apply if the default continues further or in response to orders issued by tax authorities.
Thus, timely and accurate filing of Form 3CEAC is essential to avoid financial and compliance risk.
Differences from OECD Approach & Indian Specifics
The Indian regime of CbC reporting, under Section 286 and the rules, broadly aligns with BEPS Action 13, but also has certain local nuances:
- The Indian intimation (Form 3CEAC) is mandatory for resident constituent entities whose parent is non-resident, ensuring the Indian authority is informed of the reporting arrangement.
- The timing requirement ensures that India is not left in the dark about which jurisdiction will host the group’s CbC filing.
- The penalty regime under section 271GB is rigid and may escalate with longer delays.
- Indian rules also deal with “alternate reporting entities” and scenarios where reporting via the parent is not possible (due to no exchange mechanism or systemic failure), compelling the Indian entity to step in.
These features make the Indian approach somewhat more prescriptive, especially in terms of intimation and fallback scenario handling.
Practical Considerations & Best Practices
- Advance Planning:
Indian constituent entities should monitor the status of the parent entity’s jurisdiction (whether exchange mechanisms are in place) and the group’s CbC reporting schedule, so that the intimation is ready in good time. - Coordination with Group Entity:
The tax, finance and legal teams across the international group should coordinate to decide on the alternate reporting entity, share its address, country, and ensure consistency. - Consistent Information Flow:
Data provided in Form 3CEAC must be consistent with the later CbC report (Form 3CEAD). Discrepancies may trigger queries from tax authorities. - Fallback Strategy:
If, at a later stage, it becomes clear that the parent’s jurisdiction will not report (due to lack of exchange or systemic failure), the Indian entity may have to file a local CbC report. The intimation must be drafted with awareness of such contingency. - Timely Filing & Tracking:
Because the due date is tied to the parent entity’s CbC filing deadline, companies must closely monitor that timeline and issue the intimation well in advance. - Document Retention:
Maintain copies of the intimation, supporting declarations, and inter-group designations for future audits or assessments.
Conclusion
Form 3CEAC under Section 286(1) is an important compliance step in India’s CbC reporting framework. It serves as a formal intimation by a resident constituent entity of an international group, notifying Indian tax authorities about which entity will file the CbC report, and where.
By requiring this preliminary disclosure well ahead of the actual CbC reporting deadline, the law strengthens transparency and coordination between Indian tax authorities and the international reporting regime. Given the potential penalties under section 271GB, it is critical for groups with Indian operations to monitor their global reporting obligations, designate responsibilities early, and ensure timely, accurate filing of Form 3CEAC.
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