Centre: GSTN Under PMLA Authorizes Investigators to Properly Deal with Fraud

The union government’s step to draw the GSTN beneath the purview of the Prevention of Money Laundering Act has the objective to empower the related investigating agencies concerning tax fraud along with money laundering cases and not providing outright access to the information to any party revenue secretary Sanjay Malhotra said.

The new finance ministry announcement highlighted that it will merely provide more information to our tax officials, the secretary told reporters following the 50th GST Council meeting here in the national capital.

GSTN is the information’s receiver. It was made clear that ED is not receiving any information from this notification, nor is it sharing any information from it.

Wherever authorities believe there may be a risk of tax evasion or money laundering, the Director of FIU (Financial Intelligence Unit) gives information to support those authorities.

A notification is been issued by the central government to draw the GSTN beneath the Prevention of money laundering act (PMLA). Through the execution of the stated order, the data stored on the GST network could now get shared as per the need beneath the PMLA Act.

The Goods and Services Tax Network (GSTN) was to be brought under the PMLA, but the Delhi National Capital Territory government objected to this and wanted a discussion.

Several Finance Ministers, including Delhi’s, highlighted a fundamental point: why was GST introduced under PMLA? On July 7th, a gazette was published under which the whole GST system was drawn beneath the Prevention of Money Laundering Act.

It signifies that people who pay GST can now be punished by the ED under the PMLA (under the guise of fraud), said Delhi NCT Revenue Minister Atishi following the 50th GST Council meeting.

According to Atishi, various other Opposition-ruled states highlighted similar concerns during the GST Council meeting.

Atishi stated We’ve seen how the ED (Enforcement Directorate) has been operated to harass and arrest people…We are opposed to this and have requested a meeting. However, the Centre and Finance Minister Nirmala Sitharaman are not willing to have a debate about it.

The meeting was presided over by Nirmala Sitharaman, the Union Finance Minister and head of the GST Council.