GSTN, established with the purpose of offering shared IT infrastructure and services, serves as a platform for the implementation of the Goods & Services Tax (GST). PMLA, on the other hand, has the objective of preventing money laundering and confiscating property linked to such activities.
While there is no active proposal to bring GSTN under the direct purview of PMLA, a recent notification issued under Section 66 of PMLA has enabled the Director of the Financial Intelligence Unit-India to share various reports related to cash transactions and suspicious activities with GSTN. These reports would be shared with GST authorities if deemed relevant for addressing GST evasion concerns.
Regarding concerns raised during the 50th Meeting and opposition from certain states, the response does not indicate any decision to bring GSTN under PMLA. However, discussions surrounding this topic highlight the importance of transparency and cooperation in addressing potential tax evasion.
Conclusion: The relationship between GSTN and PMLA showcases the government’s commitment to preventing money laundering and ensuring compliance within the context of GST implementation. While the response does not indicate a direct link between the two, the issuance of notifications indicates efforts to share relevant financial information to curb potential evasion. The evolving dynamics of this connection emphasize the need for ongoing dialogues to strike a balance between compliance, transparency, and business interests.
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GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTEMENT OF REVENUE
LOK SABHA
UN-STARRED QUESTION NO. 2965
TO BE ANSWERED ON MONDAY, THE 07th AUGUST, 2023
SRAVANA 16, 1945 (SAKA)
GSTN under Prevention of Money Laundering Act
2965. DR. G. RANJITH REDDY:
SHRI MANICKAM TAGORE B.:
SHRI VENKATESH NETHA BORLAKUNTA:
Will the Minister of FINANCE be pleased to state:
(a) the aims and objectives of Goods and Services Tax Network (GSTN) and Prevention of Money Laundering Act (PMLA);
(b) whether the GSTN has been brought under the purviews of PMLA, if so, whether this decision was taken without any discussion in the 50th Meeting and many States including Karnataka, Rajasthan, Tamil Nadu and Telangana opposed this move, if so, the details thereof;
(c) whether the Government has made any assessment about the impact of this decision on business and service providers, if so, the details thereof;
(d) whether the new law will wreak havoc on the business community as it can be used to threaten trade and industry leaders who do not toe the Government’s line or are affiliated with the opposition or have an independent voice, if so, the details thereof; and
(e) whether this step proposes to practice, promote and propagate tax-terrorism, if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The aims and objectives of GSTN is to provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders for implementation of the Goods & Services Tax (GST).
The aims and Objectives of PMLA is to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.
(b) There is no proposal under consideration to bring GSTN under the purview of PMLA. However, Government has recently issued a notification under Section 66 of PMLA enabling Director, Financial Intelligence Unit-India to send various reports like cash transaction report, suspicious transaction report etc. to GSTN for making them available to GST authorities, where such reports are found relevant for GST evasion.
(c) to (e) Does not arise.
