India’s nodal national agency responsible for administering Customs, GST, and central excise, and its apex taxation body for direct taxation on Tuesday signed an agreement for data exchange between the two organisations, allowing them to share data on an “automatic and regular basis”. In addition to regular exchange of data, CBDT and CBIC will also exchange with each other, “on request and spontaneous basis, any information available in their respective databases which may have utility for the other organisation”. This comes just weeks after CBDT signed a similar agreement with market regulator SEBI.

A Data Exchange Steering Group has also 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 Finance Ministry said in a statement. It’s unclear who the members of these steering group are.

This agreement supersedes a data access agreement between CBDT and CBIC in 2015 since “significant developments have taken place since the signing of earlier MoU in 2015 including introduction of GST, incorporation of GSTN and change in the nomenclature of Central Board of Excise and Customs (CBEC) to Central Board of Indirect Taxes and Customs (CBIC),” the Ministry said.

The MoU was signed by Pramod Chandra Mody, chairman of the Central Board of Direct Taxes (CBDT), and M. Ajit Kumar, chairman of the Central Board of Indirect Taxes and Customs (CBIC).

Why this is important: We had earlier pointed out that since data can be shared on an automated basis, the two agencies have unfettered access to each other’s databases which they can use at will and information is no longer siloed. This is symptomatic of a larger trend in the government that seeks to merge different databases to great centralised repositories of data on citizens and organisations, as was thoroughly documented in the Economic Survey of 2018-19.