Rule 107 - Withdrawal of application for agreement
Local extract available Legacy mapping: 10J
Reviewed by CA Nikhil Gupta, 29 August 2026
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For the connected rule or filing step, see Rule 109 - Procedure for advance pricing agreement.
Primary authority: Notification No. 22/2026 / G.S.R. 198(E)
Currentness control: Base Rules effective 1 April 2026. Check later amendments, corrigenda and portal implementation before action.
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Finin2min implementation framework: withdrawing an APA application
Why withdraw
An applicant may withdraw an Advance Pricing Agreement (APA) application because negotiations are stalling, the underlying business/transaction structure has materially changed, or the applicant now prefers Mutual Agreement Procedure (MAP) or ordinary transfer-pricing assessment instead.
The non-refundable fee trap
The APA filing fee is NOT refunded on withdrawal - Rule 107(2) is explicit. Withdrawing late in the process (after significant Competent Authority or FT&TR-division engagement) forfeits the fee with nothing to show for it, so withdrawal should be a deliberate decision, not a default when negotiations slow down.
Timing window
Withdrawal is only available BEFORE the terms of the agreement are finalised - Rule 107(1). Once terms are finalised, this exit route closes; the applicant is either in the agreement or must pursue a different resolution route entirely.
Who to notify
The correct recipient of the withdrawal intimation depends on the APA type: for a UNILATERAL agreement, notify the Principal Chief Commissioner of Income-tax (International Taxation); for a BILATERAL or MULTILATERAL agreement, notify the Competent Authority of India instead - sending the intimation to the wrong authority does not validly withdraw the application.
What withdrawal does NOT do
Withdrawing an APA application does not bar a future re-application, and it does not retroactively change the transfer-pricing position taken in returns already filed for years covered by the (now-withdrawn) proposed agreement - those years remain open to ordinary assessment and scrutiny on their own terms.
Evidence and retention checklist
Retain the original APA application, all correspondence with the Competent Authority/FT&TR division, the fee payment challan, the withdrawal intimation itself with proof of delivery to the CORRECT authority, and any internal memo documenting why withdrawal was chosen over continuing negotiation.
Finin2min Q&A
Is this page the notified Rule?
It contains a local statutory extract, but the linked official source and later amendments control.
What should be verified immediately before use?
Effective date, amendment history, forms or utilities, filing channel, authentication method, due date, fees, transition from the 1962 Rules and any judicial interpretation.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Official starting point
- www.incometaxindia.gov.in
Page source links
Current-law and operative-rule checkpoint
- Confirm the exact notified rule text and effective version before relying on a threshold, form, percentage or timeline.
- Read the rule with its parent Act provision, provisos, explanations, schedules and linked forms.
- Separate the legal rule from portal workflow or administrative guidance, and date-gate any transition claim.
- For compliance use, preserve the primary-source instrument and the facts/evidence supporting the conclusion.