The inclusion of the Goods and Services Tax Network under the Prevention of Money Laundering Act is a move to empower tax authorities with information and meet Financial Action Task Force evaluation requirements, according to Revenue Department Secretary Sanjay Malhotra.
The July 7 notification means that the GSTN will be a recipient of information and the Enforcement Directorate will not get any information or share any information, he said at the press conference after the 50th GST Council meeting.
"...there were doubts that GSTN would start sharing information about private businesses with other law enforcement agencies like ED … it was clarified that Director FIU will provide information to empower authorities wherever they feel there is any chance of tax evasion or money laundering," he said.
The notification was issued in line with the requirements under the Financial Action Task Force's mutual evaluation, which is currently underway, Malhotra said.
The inclusion, he said, falls under Section 66 of the Prevention of Money Laundering Act (2002) and has nothing to do with the GST law.
Last week, the revenue department issued a notification saying that the GSTN would fall within the ambit of the PMLA, allowing for the sharing of information between the GSTN, the Financial Intelligence Unit, the Enforcement Directorate, and other investigative agencies.
Ahead of the 50th GST council meeting, Aam Aadmi Party leaders Atishi and Harpal Singh Cheema raised concerns about the inclusion of GSTN under the PMLA ambit without prior discussion.
Delhi Finance Minister Atishi noted that several states like West Bengal, Tamil Nadu, Karnataka, Telangana, Chhattisgarh, Rajasthan, Himachal Pradesh and Punjab also supported and raised the issue mentioned above.
At the press conference after the council meeting, Union Finance Minister Nirmala Sitharaman said that she had mentioned that discussion would be taken up after the agenda items were tabled for the day, which was subsequently addressed by the revenue secretary.
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