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Sharing criminal information with GSTN will enable the authority to curb suspicious business activities. (photo: News18)
GST related offenses such as fake invoices and fraudulent input tax credits will now be covered under the PMLA
On Saturday, the center issued a notice to bring the Goods and Services Tax Network (GSTN) under the jurisdiction of the Prevention of Money Laundering Act (PMLA). According to the notice, information stored on GSTN can now be shared in accordance with the provisions of the PMLA.
The Ministry of Finance, Revenue Department said the notification was issued in the exercise of powers conferred under Clause (2) of Subsection (1) of Section 66 of the Money Laundering Prevention Act 2002.
The Prevention of Money Laundering Act (PMLA) was enacted to address issues of terrorist financing and drug trafficking. GST related offenses such as fake invoices and fraudulent input tax credits will now be covered under the PMLA.
Nagendra Kumar, senior advisor at Deloitte told Moneycontrol.com that GSTN contains highly sensitive data at a detailed level, which can be of great help in investigations. The inclusion of GSTN in the PMLA is expected to be extremely beneficial to the Enforcement Directorate (ED) in conducting more effective investigations, he said.
According to Rajat Mohan, Senior Partner at AMRG & Associates, sharing incriminating information with GSTN will enable the authority to curb suspicious business activities. He said this enhanced capability will help the government identify and understand the root source of fraudulent transactions, and ultimately foster a more compliant ecosystem.
According to the report, the Goods and Services Tax (GST) has made significant progress in six years. The number of taxpayers has doubled, rising from around Rs 68 lakh in 2017 to around Rs 1.4 crore. At the same time, the average monthly revenue has also witnessed a significant growth, almost doubling from approximately Rs. 90,000 crore in 2017-18 to Rs. 1.69 crore in the current financial year.
This development follows the geocoding of 1.8 crore corporate addresses registered by the GST network. Geocoding enables the exact location of registered entities to be determined, making it easier to detect false registrations.
The Central Board of Indirect Taxes and Customs (CBIC) has already conducted a pilot geocoding project in selected states. GSTN informed the companies on Friday that the primary workplace geocoding functionality is now active for all states and union territories.
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