NEW DELHI: Reflecting renewed interest in government's APA mechanism, over 200 foreign companies (MNCs) have filed applications with the tax department to obtain ruling over intra-group pricing arrangement and ensuing tax liability.According to sources, so far six companies have entered into Advance Pricing Agreement (APA), a mechanism that seeks to end future disputes with tax authorities arising from transfer pricing.Sources said the tax authorities are scrutinising about 300 applications, which include 146 filed earlier, and more APAs are expected to be signed next month."We are hoping that the same level of commitment will continue from the tax department side. They can clear the backlog in few months time," Ernst & Young Partner and National Leader Vijay Iyer said.Generally, an APA is valid up to 5 years and the Act provides for renewal, revision or cancellation of an APA under certain circumstances.During the 5-year period, the taxpayer is required to file an annual report to confirm compliance with the terms of the APA. The tax authorities shall then conduct limited audit of the taxpayer to ensure compliance with the terms of the APA."The Indian APA programme has been the fastest to sign the initial APAs within one year of them being applied," auditing firm PWC said.Deloitte Haskins and Sells Senior Director S P Singh said: "With the present workforce, the APA team will have very uphill task in maintaining the high standard they have set in the first year and at the same time reach agreements for the pending applications within a short time framework."An APA, usually for multiple years, is signed between a taxpayer and the tax authority (Central Board of Direct Taxes in India) on an appropriate transfer pricing methodology for determining the price and ensuing taxes on intra-group overseas transactions.Transfer pricing - transaction prices between separate entities of a large company - has generated much heat in connection with investments by large MNCs like Vodafone, Shell, WNS and Nokia.MNCs are often accused of misusing the system to transfer profits to their subsidiaries in countries that have low tax rates.The law requires that goods and services be sold to subsidiaries by parent companies at arm's length price -- the price at which goods are traded between unconnected companies.As per the APA rules notified by the Finance Ministry in 2012, fee for entering into APA with the CBDT would be Rs 10 lakh for international transaction up to Rs 100 crore, Rs 15 lakh for those up to Rs 200 crore and Rs 20 lakh for transactions above Rs 200 crore.