MoU between “Ministry of Corporate Affairs & Central Board of Indirect Taxes and Customs (CBIC)” on Exchange of Data

It will use data analytics and artificial intelligence to improve regulatory enforcement

• The Ministry of Corporate Affairs (MCA) has signed a Memorandum of Under-standing (MoU) with the Central Board of Indirect Taxes and Customs (CBIC)
• It is for exchanging data such as import-export transactions and financial statements of companies registered in the country
• The move, expected to enhance ease of doing business, will use data analytics and artificial intelligence to improve regulatory enforcement

Salient facilitations of MoU

• The MoU is in line with the vision of MCA and CBIC to harness data capabilities to ensure effective enforcement
• 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
• The data sharing arrangement gains significance in light of development of MCA21 Version 3 which will utilize state of the art technology for enhancing ease of doing business in India
• It will 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 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 purpose
• 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

Background for MoU

• 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
• 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 MoU marks the beginning of a new era of cooperation and synergy between the two organizations

What is “MCA21 Version 3”?

• MCA-21 is an initiative under Ministry of Corporate Affairs storing all registered companies that file accounts online with MCA
• The new MCA-21 V 3.0 will have features like single source of truth, ease of doing business, e-adjudication, online compliance monitoring, all aimed at improving the authenticity and comprehensiveness of corporate It may also make the current registrar of companies (RoC) appear obsolete

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