Now, GSTN can seek info from ED on any case
New Delhi, July 9, 2023
The Union finance ministry, through a gazette notification on Friday, empowered the Goods and Services Tax Network (GSTN) under the Prevention of Money Laundering Act (PMLA) to formally seek from the Enforcement Directorate information relating to any case the latter may be investigating or information in its possession. The GSTN is the 25th agency to get such a legal mandate after 24 other enforcement and intelligence agencies.
The GSTN runs its own Business Intelligence and Fraud Analytics (BIFA) tool which started in 2019 with the help of Infosys. This is intended to provide intelligence inputs to state and central GST authorities with advanced analytics to detect frauds in the administration of GST.
Now, it is legally binding on the ED to share information with the GSTN where it finds implication of tax administration and money laundering related to the implementation of GST. With this additional input, GSTN can further leverage its own data and generate actionable information for agencies, such as the Directorate General of GST Intelligence, working to plug GST frauds. The PMLA has been widened in recent months with more reporting agencies included in sharing of information related to tax evasion, terror funding and money laundering.
"In exercise of the powers conferred by Clause (ii) of sub-section (1) of Section 66 of the PMLA, the central government, being satisfied that it is necessary in the public interest to do so, hereby makes the following further amendment in the notification of the government of India, in the ministry of finance, department of revenue, published in the gazette, extraordinary, Part II, Section 3, sub section (i)...In the said notification, after serial number 25 and the entry relating thereto, the following serial number and entry be inserted: Goods and Services Tax Network," the notification read.
The Centre had recently amended the PMLA and brought in all NGOs and trusts under the ambit of the anti-money laundering act for reporting purposes. Virtual asset service providers, crypto currency exchanges, have also been made reporting entities under the PMLA. Like banks, they need to report all suspicious transactions to the Financial Intelligence Unit (FIU).
While defining Politically Exposed Persons (PEPs), the government had brought them, too, under the PMLA ambit. The rules redefined the 'beneficial ownership' in any entity for all financial institutions to report suspicious transactions to the FIU.
The amendments introduced the definition of PEPs under the PMLA to meet the requirements of the Financial Action Task Force (FATF), a Paris-based inter-governmental body that sets standards and monitors effective implementation of measures adopted by each country in combating money laundering and terrorist financing. "PEPs are individuals who have been entrusted with prominent public functions by a foreign country, including the heads of states or governments, judicial or military officers, senior executives of state-owned corporations," according to notification.
[The Times of India]
