To facilitate smooth transfer and exchange of data including GST, excise, and customs along with the personal income tax and corporation tax, the departments of direct and indirect tax have today signed a memorandum of understanding. The fresh MoU will likely create a landscape for more transparent and holistic information sharing, helping tax authorities to detect incidents of tax evasion.
With the MoU signed between the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC), the government bodies can exchange information on request and a spontaneous basis, in addition to the regular exchange of data.
Both departments have been already sharing information through various existing mechanisms as an MoU was earlier signed between CBDT and the erstwhile Central Board of Excise and Customs (CBEC) in the year 2015. However, since 2015, many important developments such as the introduction of GST, incorporation of GSTN and change in the nomenclature of the Central Board of Excise and Customs (CBEC) to the Central Board of Indirect Taxes and Customs (CBIC), took place.
These new developments have been incorporated in the MoU signed today and the government believes that the MoU will mark the beginning of a new era of cooperation and synergy between the CBDT and the CBIC.
The government further said that a Data Exchange Steering Group has also been constituted, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data-sharing mechanism. Meanwhile, GST intelligence has recently spotted incidents of fraud related to Rs 500 crore by Pan Masala manufacturers. The GST intelligence wing is also reportedly set to check tax evasions by hand sanitiser manufacturers across India.