Centre Brings GSTN Under PMLA Act

GST Network Brought under PMLA Act

Govt brings GSTN under PMLA, enables sharing of data with investigating agencies

Aiming to plug tax evasion through fake billing, Centre has brought the GST Network (GSTN) under the purview of Prevention of Money Laundering Act (PMLA). This will give more power to the Enforcement Directorate (ED), the anti-money laundering agency, to act against tax evasion within GSTN. The government through a gazette notification, notified the exchange of information between ED and GSTN under the Prevention of Money Laundering Act, 2002 (PMLA) to help in such kind of investigations.

The notification is regarding sharing of information between ED and GSTN under section 66(1)(iii) of PMLA. The Central Board of Indirect Taxes and Customs (CBIC) has been bullish on preventing tax evasion.CBIC chairman Vivek Johri had said last month that the government is serious towards curbing the practice of fake billing and fake invoicing and also identifying fake businesses.PMLA was enacted to tackle terror funding and drug trafficking. The notification will now facilitate sharing of information or material in possession between ED and GSTN, to check any violations of GST provisions. 

GST Under PMLA Act



The portal is aimed at providing shared IT infrastructure and services to Central and State governments, taxpayers and other stakeholders for implementation of GST. Some of GSTN’s functions are facilitating registration, forwarding returns to relevant Central and State authorities, computation and settlement of IGST, matching tax payment details with banking network, providing analysis of taxpayers’ profile and matching invoices.  

Besides the ED and the FIU, agencies that need to share information include the Competition Commission of India, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Serious Fraud Investigation Office, and Director General of Foreign Trade. This list is updated from time to time.  

PMLA was enacted to tackle terror funding and drug trafficking. The PMLA Act also provides for confiscation of property derived from or involved in money-laundering.  



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