Under the Ministry of Finance, two tax policies ie, The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Custom (CBIC) have signed a Memorandum of Undertaking (MoU) for data exchange.
The Central Board of Direct Tax is a statutory authority that is functioning under the Central Board of Revenue act, 1963. The functions of CBDT include the formulation of policies, dealing with matters relating to levy and collection of direct taxes, and supervision of the functioning of the entire Income Tax Department. They also propose the legislative changes indirect tax enactments and changes in rates and structure of taxation in tune with the policies of the Government. The board consists of the Chairman and six members, and the chairman is the co-ordinating head and each of the members has been assigned a specialized function, and also they are assisted by Joint Secretaries, Directors, Deputy Secretaries, Under Secretaries and ministerial staff for carrying out their day-to-day functions. Territorial zones have been assigned for the chairman and the members to supervise and monitor the work of field formations. The CBIC is the new normal of the old Central Board of Excise and Customs (CBEC). They deal with the tasks of formulation of policy concerning levy and collection of Customs and Central Excise duties, prevention of smuggling and administration of matters relating to Customs, Central Excise and Narcotics to the extent under CBEC’spurview. CBDT remains the apex policy-making body for the corporate tax and personal income. The MoU was signed by Mr. Pramod Chandra Mody, Chairman, CBDT, and Mr. Ajit Kumar, Chairman, CBIC, in the presence of senior officers from both the organizations.
The Memorandum of Undertaking is an agreement done on mutual consent under certain terms and conditions. This also indicates the common line of action between the two parties. It is often the first stage in the formation of a formal contract. The Memorandum of Undertaking will facilitate the sharing of information and data on an automatic and regular basis. In addition to the regular manner, they will also exchange data regarding the CBDT and CBIC with each other on request and a spontaneous basis with any information available in their respective databases. The MoU comes into existence from the date to which it was signed and this is an ongoing initiative of CBDT and CBIC, which are already collaborating through various existing mechanisms. For the periodic review and the data exchange process, a data exchange steering group has also been constituted. They will take further steps to improve the effectiveness of the data-sharing mechanism.