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What does CBIC and CBDT signing an agreement mean to taxpayers?

Have you ever wondered how and why the GST sales of a business is a part of an Income-tax related form, Form 26AS?

Aren’t both GST and IT collected independently by different organisations?


Read on and know why CBIC and CBDT renewed their data sharing agreement and what impact it has on you as an assessee.



Let’s understand quickly what CBIC and CBDT are.

  1. The Central Board of Direct Taxes or CBDT is the apex body that deals with direct tax laws in India, that is, Income Taxes.

  2. The Central Board of Indirect Taxes and Customs or CBIC is the apex authority that looks into indirect taxes, that is GST and Customs Duties.

They cooperate and collaborate on various matters related to tax administration, policy formulation, and achieve maximum tax collection and its compliance in India.


This collaboration includes sharing information, coordinating investigations, and ensuring smooth tax administration across both direct and indirect taxes.


One such device is the data sharing agreement that was renewed in July, this year. This replaces the original signed in 2015 and this is considered to be important due to the major changes that have happened since then, like the introduction of GST. A special “Data Exchange Steering Group” also has been constituted to monitor the data exchange through periodic meetings.


All of this is fine, but how does it affect you as an assessee?


With the enhanced data available with both bodies, any inconsistency of information will be swiftly flagged and investigated on.


Let us give you an example:

  • There’s a business called Alpha, that’s registered under GST.

  • Say, for the financial year 2022-23, Alpha paid a total of ₹18 lacs in GST but has only disclosed a meagre income in its ITR.

  • This is a cause for concern for CBDT because, if Alpha managed to pay so much in GST, it shows that it had a good turnover in the year.

  • But at the same time, if the income tax collection hasn’t increased, it might mean Alpha has underreported its income.

And this is what this arrangement seeks to achieve in its most basic sense.


In fact, Notices from both bodies are already being sent to companies and individuals based on their returns. As reported by the Economic Times, a tax notice questioned how a company paid lakhs in income tax but zero in service tax for 2014-15 in a certain assessee’s case.


A spokesperson of CBDT said, “This marks the beginning of a new era of cooperation and synergy between the CBDT and CBIC”. Data analytics has enabled the Department to flag questionable returns at incredible speeds.


With all the developments in the infotech space, these bodies will only get stronger.

The number of notices and investigations are only going to increase.


And that’s why we, at Sawingz, help you through the year to keep your returns a hundred percent legally compliant, all while we also help you save the most possible taxes possible through tailor-made strategies drawn up by the very best of our advisors. We hold your hand right from the tax-saving process and beyond the return filing to safeguard your interests in case you’ve been served a notice.


That’s that. CBIC and CBDT have come together to mastermind and make tax collection efficient. And now you know why it is a big deal.


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