Why NIC codes matter in transfer pricing
Every quantitative comparability analysis in India starts the same way: extract companies from Prowess or Capitaline using a National Industrial Classification (NIC) code. Choose the wrong 5-digit code and your initial dataset is either too broad (thousands of irrelevant companies) or too narrow (too few to form an arm’s-length range). Incorrect classification is a common challenge raised by Transfer Pricing Officers (TPOs) during scrutiny.
How a NIC-2008 code is structured
NIC-2008 is hierarchical. The code 62020, for example, breaks down as: section J (Information and communication), division 62 (Computer programming, consultancy and related activities), group 620, class 6202, and sub-class 62020 (Computer consultancy and computer facilities management activities). The 5-digit sub-class is the granularity used for database screening.
Using the finder in your benchmarking workflow
Map your tested party’s functions to one primary NIC code, then run the same code (plus adjacent codes in the same class) in Prowess or Capitaline to build the initial comparable pool. Once you have the dump, the real work begins: reading annual reports and rejecting non-comparables. That is where TP Analytics’ AI takes over.