No Proposal under Consideration to bring GSTN under Purview of PMLA; Clarifies Minister Pankaj Chaudhary

The State Finance Minister Pankaj Chaudhary has responded in writing, stating that there is currently no plan being discussed to place the Goods and Services Tax Network (GSTN) within the scope of the Prevention of Money Laundering Act (PMLA).

A set of 5 questions was asked by Member of Parliament (MP) Dr. G Ranjith Reddy, MP Manickam Tagore and MP Venkatesh Netha Borlakunta. The questions includes:

(a) the aims and objectives of Goods and Services Tax Network (GSTN) and Prevention Of Money Laundering Act (PMLA);

(b) whether the GSTN has been brought under the purviews of PMLA, if so, whether this decision was taken without any discussion in the 50th Meeting and many States including Karnataka, Rajasthan, Tamil Nadu and Telangana opposed this move, if so, the details thereof;

(c) whether the Government has made any assessment about the impact of this decision on business and service providers, if so, the details thereof;

(d) whether the new law will wreak havoc on the business community as it can be used to threaten trade and industry leaders who do not toe the Government's line or are affiliated with the opposition or have an independent voice, if so, the details thereof; and

(e) whether this step proposes to practice, promote and propagate tax-terrorism, if so, the details thereof?

While answering to question (a) put forward by the Lok Sabha MPs, the minister replied that “The aims and objectives of GSTN is to provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and Other stakeholders for implementation of the Goods & Services Tax (GST).

The aims and Objectives Of PMLA is to prevent money-laundering and to provide for

confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto.”

Further considering the question (b) the minister stated that “there is no proposal under consideration to bring GSTN under the purview of PMLA However, Government has recently issued a notification under Section 66 of PMLA enabling Director, Financial Intelligence Unit-India to send various reports like cash transaction report, suspicious transaction report etc. to GSTN for making them available to GST authorities, where such reports are found relevant for GST evasion.”

The Minister also clarified that the questions from (c) to (e) do not arise.

To Read the full text of the Order CLICK HERE

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