GSTN Under PMLA: GST Network under PMLA Act

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The Prevention of Money Laundering Act will cover Centre Notifies GSTN to prevent tax evasion.

Goods and Services Tax Network (GSTN) will be brought under the Prevention of Money Laundering Act (PMLA) to reduce tax evasion through fake billing, the Central Government announced on Saturday.

The said order will allow the Enforcement Directorate and the anti-money laundering agency to take more significant action against tax evasion within GSTN by sharing information stored on the GST Network protected by the PMLA Act.

“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 Gazette of India, Extraordinary, Part II, “Section 3, Sub-section (i), vide number G.S.R. 381(E), June 27, 2006,” the official notification says the above statement.

“The notification shall insert the following serial number and entry, which is (26) Goods and Services Tax Network, after the serial number (25) and the entry relating to it,” it was also mentioned.

As a result of PMLA, terrorist funding and drug trafficking are being addressed. ED and GSTN will now be able to share information or material in their possession in order to verify whether GST provisions have been violated.

GSTN is brought under PMLA, enabling data sharing with the FBI and ED

As part of the PMLA’s Section 66, which deals with information disclosure, these changes have been made

The information technology system GSTN manages the GST portal for Goods and Services Tax (GST).

As part of the Prevention of Money Laundering Act (PMLA), the Centre on Saturday included the Goods and Services Tax Network (GSTN). Accordingly, GSTN has been mandated by the PMLA Act to share information with the Enforcement Directorate (ED) and Financial Intelligence Unit (FIU). THESE CHANGES HAVE BEEN MADE under PMLA Section 66, which provides for information disclosure.  

If the FIU or ED finds a GST assessee involved in suspicious forex transactions, they will also notify the GSTN. Under the Prevention of Money Laundering Act, GST offences such as taking fake input tax credits, creating fake invoices, etc., will also be covered.  

An information technology system oversees the GST portal, known as the Goods and Services Tax Network (GSTN). The government uses the GSTN to monitor domestic financial activity.  

GST portal provides shared IT infrastructure and services to Central and State governments, taxpayers, and other stakeholders. GSTN facilitates registration, forwards returns to relevant Central and State authorities, computes and settles IGST, matches tax payment details with banking network, provides analysis of taxpayer profiles, and matches invoices.  

As well as the ED and the FIU, other agencies need to share information, including the Competition Commission of India, the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulation and Development Authority, the Serious Fraud Investigation Office, and the Director General of Foreign Trade. Updates are made to this list periodically.  

Drug trafficking and terrorist financing were the goals of the PMLA. Money laundering-related property can also be confiscated under the PMLA Act.

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