CBDT to share MSME data with Ministry

Our Bureau Mumbai | Updated on July 21, 2020

The Central Board of Direct Taxes (CBDT) has signed a memorandum of understanding (MoU) with the Ministry of Micro, Small and Medium Enterprises (MoMSME) for sharing data on income tax returns filed by micro and small enterprises. This will be used to ascertain the cash flow of MSMEs and ensure that they do not misuse the concessions given by the government.

The CBDT data will enable the MoMSME to check and classify enterprises in the MSME category as per the criteria notified by the government.

The MoU comes into force from Tuesday and both the organisations will appoint Nodal Officers and Alternate Nodal Officers to facilitate the process of data exchange. The MoU marks the beginning of a new era of cooperation and synergy between the CBDT and MoMSME.

Makarand Joshi, Partner at MMJC and Associates LLP, a corporate compliance firm, said the tax authorities have tightened the screws on companies that continue to enjoy MSME status despite having surpassed the earlier parameter based on investment limit in plant and machinery.

Moreover, he said, there was no annual verification of the MSME status from the department. The new era of compliance and enforcement initiated for the MSME sector will effectively ensure that the benefits and sops go to those companies that are within the ambit of MSMEs and not those that pretend to be so, he added.

Published on July 21, 2020

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