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As Kejriwal raises concern over GST being linked to ED, a clarification from govt
The Union government clarified that the Prevention of Money Laundering Act (PMLA) has no connection to the Goods and Services Tax (GST) law.
The Prevention of Money Laundering Act has nothing to do with GST law, the Union government on Tuesday clarified after Delhi chief minister Arvind Kejriwal raised concern over a notification bringing the Goods and Services Tax Network (GSTN) under the PMLA. Sanjay Malhotra, Revenue Secretary, told a press conference that the notification was issued to fulfil a requirement under the Financial Action Task Force (FATF), adding that the Enforcement Directorate will neither receive nor provide any information through this notification.
Kejriwal on Tuesday alleged that with the GST being linked with the ED, even those traders paying the tax can be arrested by the federal agency.
"A large proportion of traders do not pay GST -- some out of compulsion, some intentionally. A few days ago, the Centre also brought the GST within the purview of the ED. It means that now, if a businessman does not pay the GST, the ED will arrest him directly and bail will not be granted," Kejriwal alleged in a tweet in Hindi.
Kejriwal hoped that people would oppose this development at the GST Council meeting on Tuesday.
According to the amendment to the provisions of the PMLA, 2002, GSTN has been included in the list of entities with which the ED will share information.
GSTN handles the technology backbone of the indirect-tax regime and is the repository of all GST-related information, including return, tax filing and other compliances.
News agency PTI earlier reported that the government amended the provisions of the money-laundering law to allow the ED to share information with the GST network. The move would help in the recovery of the GST evaded through money laundering, the report said.
Addressing a press conference after GST Council meeting, Malhotra said, “The Prevention of Money Laundering Act has nothing to do with GST Law. The notification has been issued because, under the FATF, our mutual evaluation is already under process. To fulfil that requirement we have issued that notification.”
He added, “This notification will empower our tax authorities with more information. The GSTN is a recipient of information. They (members of GST Council) had doubts as to whether GSTN will start sharing information about private businesses with other law enforcement agencies, including ED.”
“Neither ED is getting any information nor it is providing information through this notification. The director of FIU (Financial Intelligence Unit) shall provide the information to empower authorities wherever they feel there's a chance of tax invasion or for purposes of money laundering.”
