Know What Data will be Shared by MCA and CBIC and How it will Benefit
The Ministry of Corporate Affairs (MCA) and Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance, has signed a Memorandum of Understanding (MOU) for data exchange between the two organizations. The MoU is in line with the vision of MCA and CBIC to harness data capabilities to ensure effective enforcement.
What is the role of the CBIC?
Central Board of Indirect Taxes and Customs is a part of the Department of Revenue under the Ministry of Finance which deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview.
What is the role of the MCA?
The Ministry of Corporate Affairs (MCA) regulates corporate affairs in India through the Companies Act, 1956, 2013 and other allied Acts, Bills and Rules. MCA also protects investors and offers many important services to stakeholders.
The Ministry is also responsible for administering the Competition Act, 2002 to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers through the commission set up under the Act.
What data will be shared under the MoU?
- The MoU will facilitate the sharing of data and information between MCA and CBIC on an automatic and regular basis.
- It will enable sharing of specific information such as details of Bill of Entry (Imports), Shipping Bill (Exports) Summary from CBIC and financial statements filed with the Registrar by corporates, returns of allotment of shares.
- The MoU will ensure that both MCA and CBIC have seamless linkage for regulatory purposes.
- In addition to regular exchange of data, MCA and CBIC will also exchange with each other, on request, any information available in their respective databases, for the purpose of carrying out scrutiny, inspection, investigation, and prosecution.
Who will benefit from this MoU?
- Both the organizations are going to benefit from access to each other’s databases which include details of import-export transactions and consolidated financial statements of companies registered in the country.
- Big data will help identify potential of tax evasion done by business and others
- Export data will be captured at multiple places and any deviation will be asked to explain
- Technology and data will play a critical role going forward in fulfilling the Government’s vision of minimum government, maximum governance and both MCA and CBIC are well placed to fulfil this vision.
Formation of Data Exchange Steering Group
A Data Exchange Steering Group also has been constituted for the initiative, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data-sharing mechanism.
The data-sharing arrangement gains significance in light of the development of MCA21 Version 3 which will utilize state of the art technology for enhancing the ease of doing business in India and improve the regulatory enforcement and similar steps by CBIC like the launch of ADVAIT (Advanced Analytics in Indirect Taxation) a 360-degree taxpayer profiling tool. AI/ML, data analytics will play a critical role in achieving this synergy.
The MoU comes into force from the date it was signed and is an ongoing initiative of MCA and CBIC, who are already collaborating through various existing mechanisms. The MoU marks the beginning of a new era of cooperation and synergy between the two organizations.