Rule 10MA (2) (i) of FEMA states that the rollback provisions must be applied if the international transaction covered by the agreement (other than the rollback provision) is identical to the international transaction co

If a rollback provision is to be authorised, it must be for the same international transaction that is planned to be carried out in the foreseeable future and in regards to which an agreement has been reached. Finalizing a rollback for a transaction that isn't covered by the agreement for subsequent years is not permitted. In order to qualify as the "same international transaction," the previous year's transaction must be of the same character and be conducted with the same affiliated enterprises as the transaction that is planned for future years and for which an agreement has been made. The limitation would function to ensure that rollback provisions would only apply if the Functions, Asset, Risk (FAR) analysis of the rollback year does not differ materially from the FAR validated for the purpose of reaching an agreement in respect of international transactions to be undertaken in future years for which the agreement applies. In the Advance Pricing Agreements that CBDT is negotiating, "materially" is being defined in a broad sense. The term "materially" is to be defined in a way consistent with its ordinary meaning and such that a change in facts and circumstances is to be viewed as a change that may reasonably have resulted in an agreement with considerably different terms and conditions.