Transfer Pricing for FMCG & Consumer Goods
Brand royalty and local marketing spend sit at the heart of India's FMCG transfer pricing disputes. We help build positions that survive the "who owns the brand intangible" question.
Brand-building spend meets brand ownership
Indian FMCG subsidiaries often pay royalty to a global brand owner while simultaneously spending heavily on local advertising and promotion — spend that tax authorities have argued builds a separate, non-routine marketing intangible for the brand owner.
Typical structure
An Indian subsidiary manufactures or distributes branded consumer goods, pays royalty to the global parent, and funds local marketing that builds the parent's brand in the Indian market.
Where Transfer Pricing applies in FMCG
Brand Royalty
Royalty payments to a foreign parent for use of a global consumer brand.
AMP Expenditure
Advertising and promotion spend alleged to create marketing intangibles for the brand owner.
Contract Manufacturing
Private-label or group manufacturing arrangements benchmarked on cost-plus margin.
Distribution Margins
Resale margin analysis for importing and distributing finished consumer goods.
Bundled Brand + Distribution
Combined royalty and distribution arrangements requiring profit-split analysis.
Regional Shared Services
Cross-charging of regional marketing, supply chain or HR support functions.
How these transactions are benchmarked
CUP
Royalty rate benchmarking against comparable FMCG licensing deals.
RPM
Resale price method for distribution margin analysis.
TNMM
Manufacturing margin benchmarking for contract/private-label production.
PSM
Profit split for combined brand-and-distribution arrangements.
An AMP position built before the audit, not during it
We quantify your AMP spend intensity against comparable FMCG companies, test royalty rates against genuine licensing comparables, and prepare a functional analysis that clearly separates routine distribution activity from any brand-building function.
AMP Intensity Benchmarking
Compare marketing spend ratios against FMCG peers.
Royalty Rate Defence
Licensing comparables for brand and technology royalties.
Manufacturing Margin Study
Contract manufacturing benchmarking for private label.
Litigation Support
Representation in AMP and royalty disputes.
Our FMCG Transfer Pricing services
Royalty & AMP Benchmarking
Combined analysis reflecting how tax authorities actually assess these together.
TP Documentation & 3CEB
Local File and Accountant's Report covering all related-party categories.
Distribution Margin Study
Resale margin benchmarking for importer-distributor entities.
Audit & Litigation Support
Representation before the TPO, DRP, CIT(A) and ITAT.
Paying brand royalty or funding local marketing spend?
Get a free AMP and royalty exposure review.