Shyamal Mukherjee, head of transfer pricing at PricewaterhouseCoopers in India, is hopeful that the new panel will improve taxpayer confidence as well as curbing the amount of revenue the country’s tax department makes from assessments.

“If the new panel works then I anticipate that revenues will drop next year. I am confident of that.”

The panel was formally introduced on October 1 and will consist of three income tax commissioners. The panel will hear evidence from the tax authorities and the taxpayer and will issue binding directions and then will pass an order in compliance with these directions.

Mukherjee’s comments come as the Indian income tax department released figures on the amount of revenue generated since transfer pricing was introduced in 2001.

The figures showed that since the country’s first assessment was made in 2003, Rs15,000 crore ($3.2 billion) has been collected through adjustments.

It was also announced that since 2003, the revenue realised has risen by 20% to 25% every year.

Mukherjee argued that the figures are not a true representation of the assessments made by the authorities.

“Any assessments made are subject to a 35% tax and so the real figure of adjustments is likely to be much higher,” said Mukherjee.

The decision to introduce the dispute resolution panel was announced in the country’s budget in July. New safe harbour rules were also announced.

“These [safe harbour] rules will kick in soon and that will allow for a reduction in revenue as well,” said Rohan Phatarphekar, head of KPMG’s transfer pricing practice in India.

Four panels will operate across the country. Details on the commissioners have yet to be published, but an announcement is expected in December.