Written by Jayasri P · Last updated 29 August 2026 · Statutory references current to the Income-tax Act 2025 and the Income-tax Rules 2026.
Quick answer. A per-filing engagement buys the annual compliance file and the accountant’s report in Form 48. A transfer pricing retainer buys continuous access across the whole year, including price setting and monitoring. A project mandate buys one defined outcome, such as an Advance Pricing Agreement. Scope, not price, separates the three.
What do transfer pricing advisory services in India actually cover?
Transfer pricing advisory services in India cover three distinct bodies of work, and most buyers purchase only one of them without realising the other two exist as separate commitments. Annual compliance is bounded by a filing date, a year-round retainer by a period rather than a deliverable, and a project mandate by an outcome.
Which statutory obligations sit underneath every model?
Four obligations sit underneath all three models, and the model you choose changes who performs them rather than whether they arise. Section 171 of the Income-tax Act 2025, read with Rule 84 of the Income-tax Rules 2026, requires the Local File; section 172 read with Rule 85 requires the accountant’s report, now furnished in Form 48 in place of the erstwhile Form 3CEB. Rule 123 governs the Master File, and section 511 read with Rule 124 governs the Country-by-Country report.
The numbering changed with effect from the tax year 2026-27, and the Central Board of Direct Taxes has published a mapping of every rule in the Income-tax Rules 2026 against its predecessor in the 1962 Rules, which is where Rule 10D becomes Rule 84 and Rule 10E becomes Rule 85. A proposal still citing the 1962 numbering is describing an obligation that has moved.
What is in scope under each engagement model?
Scope is the only reliable way to compare two proposals, because the same activity appears under different headings in different documents.
| Activity or obligation | Per-filing engagement | Year-round retainer | Project mandate |
|---|---|---|---|
| Local File under section 171 and Rule 84 | Included | Included | Included if the project requires it |
| Accountant’s report in Form 48 under section 172 | Included | Included | Scoped separately |
| Master File under Rule 123 and Country-by-Country report under section 511 | Included at the threshold | Included at the threshold | Scoped separately |
| Benchmarking study for the year | Included | Included | Included if the project requires it |
| Interim benchmarking refresh during the year | Quoted separately | Included | Included within the project scope |
| Price setting for a new intercompany transaction | Quoted separately | Included | Included where it is the project |
| Drafting and review of intercompany agreements | Quoted separately | Included | Included where it is the project |
| Monitoring of actual margins against the tested margin | Quoted separately | Included | Quoted separately |
| Response to a reference to the Transfer Pricing Officer under section 166 | Quoted separately | Ordinarily a separate mandate | This is the project |
| Advance Pricing Agreement under section 168, or a safe harbour election | Quoted separately | Advisory included, filing separate | This is the project |
No cell above means a provider cannot perform the activity. The difference is whether the work is already paid for when the need arises, or whether it triggers a fresh scoping conversation at the least opportune moment.
What does a per-filing engagement include?
A per-filing engagement is an annual compliance engagement, and its boundary is the accountant’s report. It ordinarily covers the functional analysis, the benchmarking study for the year, the Local File built to the thirteen prescribed heads, and the certification in Form 48.
The engagement is staffed against a filing calendar rather than against your business. That is a genuine strength where related-party transactions are stable and already priced under an agreed policy, because the work really is the same every year. Continuous availability would buy nothing, and our article on what transfer pricing documentation must include sets out the deliverable itself.
What does a year-round transfer pricing retainer include?
A year-round transfer pricing retainer includes everything in the per-filing engagement plus continuous access during the year. That access covers price setting before a new intercompany arrangement goes live, review of agreements before they are signed, periodic comparison of actual margins against the tested margin, and a view on whether a safe harbour election is worth pursuing.
Timing is the distinguishing feature, because a retainer reaches the analysis while the price is still changeable, whereas a per-filing engagement can only document a price already charged. Where a group restructures, adds an entity or begins financial transactions with an associated enterprise, the difference is measured in adjustment risk rather than in fees.
What does a project mandate include?
A project mandate includes one defined outcome and the work required to reach it. Typical mandates are an Advance Pricing Agreement under section 168, representation in an assessment, a Mutual Agreement Procedure, or a policy design exercise for a newly formed group.
A group on a per-filing engagement that receives an unfavourable order will ordinarily appoint a separate mandate for representation through the stages of a transfer pricing dispute, while the engagement for the annual compliance will still be carried out concurrently.
What falls outside each model?
Exclusions are where unbudgeted work appears, so read every proposal for its boundary.
What sits outside a per-filing engagement?
Everything that happens between filings sits outside it. That includes a transaction entered into after the file was closed, an interim refresh of comparables, a review of a new intercompany agreement, and correspondence with the department once the year is picked up for examination.
The consequences of the file are excluded too. A secondary adjustment under section 170 arises where a primary adjustment of ₹1 crore or more is not repatriated within the prescribed period. Tracking that repatriation runs across months, by which time the filing engagement has closed.
What sits outside a retainer?
Contentious work ordinarily sits outside a retainer, and this is the most common misunderstanding in the model. A retainer covers advice and monitoring, and it does not usually extend to preparing submissions, appearing before the Transfer Pricing Officer or the Dispute Resolution Panel, or running an appeal, because those consume time in volumes no availability fee can absorb.
Applications sit outside as well, and an Advance Pricing Agreement is the clearest instance, since it runs across several years through pre-filing, application, negotiation and annual compliance reporting, so whether to apply is retainer work while the application itself is a mandate.
What sits outside a project mandate?
A project mandate covers only what its scope names, and everything outside that list falls away. A mandate to obtain an Advance Pricing Agreement does not carry the Local File for the current year, and a mandate to defend one assessment year does not carry the next, which is why groups running a dispute alongside ordinary compliance hold two engagements at once.
What happens when an assessment notice arrives mid-year?
A notice arrives without regard to your engagement calendar, and this is where the three models separate in practice. Once the Assessing Officer refers the international transactions to the Transfer Pricing Officer under section 166, the file you already hold becomes the entire basis of your defence, and no model can retrospectively improve it.
How does each model absorb the work?
A per-filing engagement absorbs none of it. The provider holds the file and is usually willing to act, but quotes for the response as fresh work, which means a scoping conversation and a fee approval while a statutory clock is already running, whereas a retainer absorbs the diagnostic stage and then hands the submissions on to a separately scoped mandate. A project mandate is the response itself.
Our guidance on how to respond to a transfer pricing show-cause notice sets out the sequence, which always begins with retrieving a file that is already complete.
How does each model handle the benchmarking refresh?
A per-filing engagement refreshes comparables once, when the Rule 84 file is built, using the most recent data available on that date, whereas a retainer refreshes when the business changes rather than when the calendar turns, which matters where margins have drifted or a comparable set has been disturbed by an acquisition.
When does a refresh become a fresh study?
The trigger is functional, not numerical. Updating financial data for the same accepted comparables is a refresh, whereas a change in the risks borne, the assets employed or the functions performed makes the earlier set inappropriate under section 165 and forces the search to be run again from the screening stage.
Groups on a per-filing engagement often discover this in the eleventh month, because nobody was watching the functional profile. A transfer pricing health check establishes which of the two situations you are in before the filing window opens.
How is intercompany monitoring handled across the year?
Monitoring is the activity most often assumed and least often purchased. It means comparing the entity’s actual operating margin against the margin the policy targets, at intervals short enough that a correction is still possible, and it belongs to a retainer because it has no deliverable of its own.
When does monitoring stop being useful?
A per-filing engagement runs the same comparison once, after the year has closed, when the only remaining option is a year-end adjustment the Transfer Pricing Officer may examine under section 166, so groups filing to a published transfer pricing due date calendar without an interim checkpoint learn the outcome too late.
Which engagement model should you choose?
Choose on the volatility of your related-party transactions, not on the size of your group. Where transactions are stable, documented under an existing policy and unchanged from the prior year, a per-filing engagement is proportionate.
Where the group is restructuring, adding entities or carrying a history of adjustments, a retainer reaches the price while the price can still be set. A project mandate is chosen on top of either, never instead of them.
What actually drives cost across the three models?
Cost is driven by the number of international transactions, the number of distinct functional profiles requiring separate benchmarking, whether the Master File and Country-by-Country obligations are triggered, the databases the analysis requires, and the volume of prior-year positions that must be defended rather than merely documented. None of those variables is a function of the model you select.
Penalty exposure is absent from that list deliberately, because failure to keep and maintain the prescribed documentation attracts a penalty of two per cent of the value of the transaction under section 442, while failure to furnish information called for under section 171 attracts a penalty under section 457. Those consequences fall on the taxpayer in every model.
Where does Steadfast Business Consulting fit?
Steadfast Business Consulting (SBC) publishes its transfer pricing scope in seven blocks, among them compliances, advisory, litigation support and representation, alternate dispute resolution routes covering advance pricing agreements, mutual agreement procedure and safe harbour, and BEPS advisory — and each of the three models above is assembled from those blocks rather than a fixed package. SBC was named a Notable Transfer Pricing Firm 2024 by ITR World Tax. The practice is built by Big 4 alumni working from Hyderabad, Mumbai, Pune and Dubai.
Which model does SBC scope for a first-time filer?
Our transfer pricing practice page sets out the published scope, and a short scoping conversation will establish which shape your related-party profile needs.
Frequently Asked Questions
Is a transfer pricing retainer worth it for a single-entity subsidiary?
Only where the transactions change. A subsidiary charging one cost-plus service fee under a stable agreement is well served by a per-filing engagement. The same subsidiary adding a royalty or an intercompany loan has moved into retainer territory, because those prices need setting before they are charged.
Can I move from a per-filing engagement to a retainer mid-year?
Yes. The typical entry point is a health check that determines your current position before the retainer begins. Moving mid-year is cheaper than moving after a notice because early opportunities to change price are available.
Does a retainer cover representation before the Transfer Pricing Officer?
Ordinarily it does not. Most retainers cover advice, monitoring and the initial assessment of a notice, while submissions and appearances are scoped separately. Confirm this in writing before signing. It is the most common gap between what a buyer assumes and what the letter says.
Which model covers the Master File and Country-by-Country report?
All three can, and all three require thresholds to be checked separately. Rule 123 governs the Master File and section 511 read with Rule 124 governs the Country-by-Country report. Confirm whether your engagement includes them, because one scoped to the Local File alone will not.
Does the engagement model change the penalty position?
No. Sections 442 and 457 place the documentation and information penalties on the taxpayer, whatever engagement shape is agreed. Scope clarity therefore matters more than the label on a proposal.