CBDT Current Affairs

Ministry of Corporate Affairs, CBDT ink MoU for Automatic and Regular Exchange of Information

The Ministry of Corporate Affairs (MCA) and Central Board of Direct Taxes (CBDT) have signed Memorandum of Understanding (MoU) for automatic and regular exchange of tax information.

The purpose of the MoU is to curb the menace of shell companies, money laundering and black money in the country and prevent misuse of corporate structure by shell companies for various illegal purposes,

Key Facts

The MoU will facilitate sharing of data and information between MCA and CBDT on automatic and regular basis. It will enable sharing of specific information such as Permanent Account Number (PAN) data of corporates, financial statements filed with Registrar by corporates, Income Tax returns (ITRs) of corporates, returns of share allotments, audit reports and statements of financial transactions (SFT) received from banks relating to corporates.

The MoU will ensure that both MCA and CBDT have seamless PAN-DIN (Director Identity Number) and PAN-CIN (Corporate Identity Number) linkage for regulatory purposes. The information shared will pertain to both Indian corporates as well as foreign corporates operating in India.

In addition to regular exchange of data, CBDT and MCA will also exchange with any information available in their respective databases with each other, on request, for purpose of carrying out scrutiny, inspection, investigation and prosecution.

Under the MoU, Data Exchange Steering Group also has been constituted for initiative, which will meet periodically to review data exchange status and take steps to further improve effectiveness of CBDT and MCA.

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CBDT signs 4 more Advance Pricing Agreements

The Central Board of Direct Taxes (CBDT) has entered into four more Advance Pricing Agreements (APAs), pertaining to sectors like telecom, banking, manufacturing and education in August 2017.

Out of these four agreements, three were unilateral and one was bilateral. The bilateral APA was for international transactions between an Indian company and UK-based company. With this, total number of APAs entered into by CBDT has reached 175. This includes 162 unilateral APAs and 13 bilateral APAs

Advance Pricing Agreements (APA)

The APA scheme of CBDT aims to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and setting prices of international transactions in advance. The APA provisions were introduced in Income Tax Act in 2012 and `rollback` provision to pull out was introduced in 2014.

The APA scheme’s objective is to strengthen government`s resolve of fostering non-adversarial tax regime. Moreover, Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in fair and transparent manner.

It endeavours to provide certainty to taxpayers in domain of transfer pricing by specifying methods of pricing and setting prices of international transactions in advance. Under BAPA, certainty in tax treatment is provided for next 5 years while rollback provides dispute redressal for maximum of four past years preceding APA years.

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