Government has issued a notification, bringing the Goods and Services Tax Network (GSTN) under the ambit of the Prevention of Money Laundering Act, 2002 (PMLA).These changes have been made under Section 66 of the PMLA, which provides for disclosure of information.
GSTN been Brought Under the PMLA Ambit
- This move aims to enhance the fight against money laundering and strengthen efforts to combat Goods and Services Tax(GST) fraud.
- The notification amends a previous 2006 notification, allowing for improved information sharing between the GSTN, Enforcement Directorate (ED), and Financial Intelligence Unit (FIU) under the provisions of the PMLA Act, 2002.
- Recently, over 69,600 suspected GST identification numbers were identified for physical verification by field tax officials in a two-month-long drive against fake registrations.
- Of these, over 59,000 were verified, and 25% were found to be non-existent.
Goods and Services Tax Network
- GSTN has developed an Indirect Taxation platform for GST in India.
- The platform helps taxpayers in preparing, filing returns, making payments, and complying with indirect tax regulations.
- It provides IT infrastructure and services to the Central and State Governments, taxpayers, and other stakeholders.
- GSTN is a not for profit, limited by shares, Government Company. It was incorporated in 2013 under Section 25 of the Companies Act, 1956 (Now Section 8 of the Companies Act, 2013).
- The company is headed by a chairman who is appointed by the Government.
- The Board of GSTN in its 49th Board Meeting held in June 2022 has approved the conversion of GSTN into Government Company and hence 100% of the shareholding being held by Government (50% with Union Government and 50% jointly with State Governments & UTs) in GSTN.
Prevention of Money Laundering Act (PMLA), 2002
- The PMLA was enacted in response to India’s global commitment (Vienna Convention) to combat the menace of money laundering.
These include
- United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988
- Basle Statement of Principles, 1989
- Forty Recommendations of the Financial Action Task Force on Money Laundering, 1990
- Political Declaration and Global Program of Action adopted by the United Nations General Assembly in 1990.