NEW DELHI: The government has included the Goods and Services Tax Network (GSTN) – the IT backbone of the GST – in the list of agencies with which authorities under the Prevention of Money Laundering Act (PMLA) can share information.
According to experts, PMLA officers collect a lot of data and this can be shared with several central agencies so that offenders can be brought to justice under various laws. By specifying GSTN in this list, requisite information will be shared with GSTN, empowering them to identify duplicitous supply chains.
Other authorities on the list are Directorate of Enforcement, Cabinet Secretariat, Intelligence Bureau, Economic Offences Wing of Central Bureau of Investigation, Chief Secretaries of the State Governments, Reserve Bank of India and the Insurance Regulatory and Development Authority of India.
“Notifying GSTN under PMLA would enable a legal framework under which high-value tax offenders can be traced, apprehended and made liable to pay due taxes. GSTN can pass on relevant information on probable tax offenders to jurisdictional officers so as to initiate proceedings under GST law for scrutiny, adjudication and recovery of taxes,” says Rajat Mohan, a New Delhi-based Chartered Accountant.
The government has been running a drive to detect fake GST registrations to curb the practice of availing fraudulent availing of input tax credits. The government has detected over 24,000 instances of fake GST invoices and fraudulent input tax credit claims worth R 63,000 crore during the ongoing drive. It has also filed over 8,000 cases against individuals and entities.
The government has been spreading the tentacles of the PMLA Act by bringing more transactions under its scope. Early this year, the government included transactions through virtual digital assets (VDAs) or cryptocurrencies under PMLA.
Activities carried out by the director or secretary of a company, a partner of a firm, trustee of a trust or nominee shareholders in the course of business on behalf of or for another person have also been brought under the purview of PMLA. In addition, those providing a registered office or accommodation, correspondence or administrative address for a company or a limited liability partnership or a trust have also been brought under the purview of the PMLA.