GST Network Brought Under the Purview of PMLA

GST Network Brought Under the Purview of PMLA

The Central Government has issued a notification dated 7 July by which it has brought the Goods and Services Tax Network (GSTN) under the Prevention of Money-Laundering Act (PMLA).

The notification by Finance Ministry has amended an earlier 2006 notification that will facilitate sharing of information between the GSTN, Enforcement Directorate and other investigative agencies.

The changes have been made for provisions under Section 66 of the PMLA, which provides for the disclosure of information.

The official notification read, “In the exercise of the powers conferred by clause (ii) of sub-section (1) of section 66 of the Prevention of Money- laundering Act, 2002 (15 of 2003), the Central Government, being satisfied that it is necessary in the public interest to do so, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance, Department of Revenue, published in the of Finance, Department of Revenue, published in the Gazette of India, Extraordinary, Part II, "Section 3, Sub- section (i), vide number G.S.R. 381(E), June 27, 2006.”

In November 2022, the government had included 15 agencies to this list, including the Competition Commission of India, National Investigation Agency, Serious Fraud Investigation Office, State Police, Director General of Foreign Trade, Ministry of External Affairs, National Intelligence Grid, Central Vigilance Commission among others for sharing of information between these agencies and the Enforcement Directorate.

The development of adding GSTN under the money laundering law aims to curb out GST fraud and fake registrations. Under the money laundering provisions, tax authorities will get more power to trace the original beneficiary in case of fraud.

GST authorities have been probing fake registrations and fraudulent availing of input tax credits.