GST Council meet: Opposition-ruled states raise concerns over inclusion of GSTN under PMLA

The issue was raised by Delhi’s Finance Minister Atishi in the meeting with support from Punjab’s Finance Minister Harpal Singh Cheema.

Atishi said at a time when the Centre is misusing powers of the Enforcement Directorate, businesses are concerned about greater scrutiny by investigative agencies. For the growth of the economy, we have to ensure businesses function smoothly, she added.

The government on July 7 through a notification has brought GSTN under the ambit of PMLA that will facilitate sharing of information between the GSTN, Enforcement Directorate and other investigative agencies.

The changes have been made for provisions under Section 66 of the PMLA, which provides for disclosure of information. In November last year, the government had added 15 agencies to this list including Competition Commission of India, National Investigation Agency, Serious Fraud Investigation Office, State Police, Director General of Foreign Trade, Ministry of External Affairs, National Intelligence Grid, Central Vigilance Commission among others for sharing of information between these agencies and the Enforcement Directorate.

The move to include GSTN under the money laundering law comes amid rising cases of GST fraud and fake registrations. GST authorities have been probing fake registrations and fraudulent availment of input tax credit. In the two-month long drive against fake registrations which began on May 16, over 69,600 suspected GST identification numbers (GSTINs) were identified for physical verification by field tax officials. Of this, over 59,000 GSTINs have been verified and over 17,000 or 25 per cent were found to be non-existent.