The ministry of corporate affairs (MCA) and the Central Board of Direct Taxes (CBDT) have signed a MoU to share data and information to keep tabs on the activities of shell companies and curb money laundering.
The memorandum of understanding was signed between CBDT and the corporate affairs ministry on September 6 and has come into effect since then, the Competition Commission of India said in a statement. The purpose of the pact is “to curb the menace of shell companies, money laundering and black money in the country and prevent misuse of the corporate structure by shell companies for various illegal purposes”, the statement said.
Both MCA and CBDT have also signed an agreement to share information on tax returns, permanent account number (PAN) and financial statements of companies on an automatic and regular basis. According to the agreement, information related to both Indian and foreign companies operating in India will be shared, as will any information available in the respective databases, if required, for the purpose of scrutiny, inspection, investigation, and prosecution.
The government has also set up a Data Exchange Steering Group that will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the two agencies. The MoU will ensure that both the ministry and CBDT have seamless PAN-CIN (corporate identity number) and PAN-DIN (director identity number) linkage for regulatory purposes.
The government had earlier said that more than 106,000 directors will be disqualified for their association with shell companies.