The Prevention of Money Laundering Act has nothing to do with the GST Act, the Union government clarified on Tuesday, after Delhi Chief Minister Arvind Kejriwal expressed concern over the notification setting up the Goods and Services Tax Network (GSTN) under the PMLA. Sanjay Malhotra, Minister of Revenue, told a press conference that the notification was issued to comply with a requirement under the Financial Action Task Force (FATF), adding that the Enforcement Directorate would not receive or provide any information through the notification.
Arvind Kejriwal on Tuesday claimed that when the GST is linked with the ED, even those traders who pay the tax can be arrested by the federal agency. He tweeted “A large section of traders are not paying GST – some under compulsion, some deliberately. A few days ago the Center also brought GST under the purview of ED. This means if a businessman does not pay GST, he will be directly arrested by ED and bail will not be granted”.
Kejriwal hoped that people would oppose this development at the GST Council meeting on Tuesday
As per the 2002 amendment to the provisions of PMLA, GSTN has been included in the list of entities with which the ED will share information.
GSTN takes care of the technological backbone of the indirect tax regime and is the repository of all GST-related information, including returns, tax returns and other filings.
Speaking at a press conference after the GST Council meeting, Malhotra said, “The Prevention of Money Laundering Act has nothing to do with the GST Act. The notice was issued because our peer review is already underway within the FATF. To comply with this request, we have issued this notice.”
He added: “This announcement will provide our tax authorities with more information. GSTN is the recipient of the information. They (GST Council members) had doubts whether GSTN will start sharing information about private businesses with other law enforcement agencies, including the ED.
“Neither the ED is getting any information nor providing it through this notification. The Director of the FIU (Financial Intelligence Unit) will provide information to the authorized authorities wherever they believe there is a possibility of tax invasion or for money laundering purposes.”
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