As per the notification issued on July 7, the government has included the Goods and Services Tax Network (GSTN) within the Prevention of Money Laundering Act (PMLA).
The Finance Ministry’s recent notice has changed a previous notification from 2006, making it simpler for the GSTN, the Enforcement Directorate, and other investigative agencies to exchange information.
Read Also: GST Identification Number (GSTIN) and Its Applicability
The modifications were implemented in order to comply with the information disclosure rules of Section 66 of the PMLA’s information disclosure regulations.
The Competition Commission of India, the National Investigation Agency, the Serious Fraud Investigation Office, the State Police, the Director General of Foreign Trade, the Ministry of External Affairs, the National Intelligence Grid, and the Central Vigilance Commission, among others totalling 15 agencies, were added to the list by the government in November of last year in order to facilitate information sharing between these organisations and the Enforcement Directorate.
Amidst an increase in cases of GST fraud and fake registrations, the decision was taken to put GSTN under the money laundering law. According to experts, the money laundering regulations will provide tax officials greater authority to identify the originating recipient in cases of fraud.
The authorities in charge of GST have investigated the use of fake tax credits and fraudulent registrations.
During a two-month campaign that began on May 16, field tax officials identified over 69,600 suspected GST identity numbers (GSTINs) for physical verification.
Out of those, more than 17,000 (around 25%) or over 59,000 GSTINs have been confirmed to be non-exempt.
