• Notification Date: 12-07-2023
• Notification No: N/A

Centre brings GSTN under PMLA, enabling Sharing of Data with ED, FIU

The Centre on Saturday issued a notification to include the Goods and Services Tax Network (GSTN) under the ambit of the Prevention of Money Laundering Act (PMLA). With this, the GSTN is among those entities that have been mandated to share information with the Enforcement Directorate (ED) and the Financial Intelligence Unit (FIU) under the PMLA Act. These changes have been made under Section 66 of the PMLA, which provides for disclosure of information.    

As per this notification, the FIU and the ED will also share information with the GSTN if they find that any GST assessee is involved in suspicious forex transactions. GST offences such as taking fake input tax credits, fake invoices, etc. will also be covered under the Prevention of Money Laundering Act.   

Goods and Services Tax Network (GSTN) is an information technology system which manages the GST portal. The government is aided by private players in its efforts to monitor domestic financial activity with the GSTN.   

The portal is aimed at providing shared IT infrastructure and services to Central and State governments, taxpayers and other stakeholders for implementation of GST. Some of GSTN’s functions are facilitating registration, forwarding returns to relevant Central and State authorities, computation and settlement of IGST, matching tax payment details with banking network, providing analysis of taxpayers’ profile and matching invoices.   

Besides the ED and the FIU, agencies that need to share information include the Competition Commission of India, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Serious Fraud Investigation Office, and Director General of Foreign Trade. This list is updated from time to time.   

PMLA was enacted to tackle terror funding and drug trafficking. The PMLA Act also provides for confiscation of property derived from or involved in money-laundering.