By bringing the Goods and Services Tax Network within the PMLA, the Center empowers ED

The Prevention of Money Laundering Act (PMLA) will now apply to the Goods and Services Tax Network (GSTN), according to a notice the Center released on Saturday. According to the announcement, it is now possible to transfer data held on GSTN in compliance with the PMLA Act’s rules.

The notice was issued in accordance with the authority granted by clause (ii) of sub-section (1) of section 66 of the Prevention of Money Laundering Act, 2002, according to the Ministry of Finance’s Department of Revenue.

To combat the problems of terrorism financing and drug trafficking, the Prevention of Money Laundering Act (PMLA) was passed. The PMLA will now provide coverage for GST-related offenses including falsified invoices and fraudulent input tax credits.

According to Nagendra Kumar, Senior Advisor at Deloitte, GSTN has very sensitive data at a comprehensive level, which may be very helpful in investigations. According to him, the inclusion of GSTN under the PMLA could greatly benefit the Enforcement Directorate (ED) in conducting more efficient investigations.

According to Rajat Mohan, Senior Partner at AMRG & Associates, the authorities would be able to restrict the operations of suspicious enterprises as a result of the exchange of damning information with GSTN. According to him, this improved capacity will help the authorities locate and capture the main culprit behind fraudulent transactions, thereby promoting a more compliant economy.

The paper claims that over the course of six years, the Goods and Services Tax (GST) has advanced significantly. Taxpayers have doubled in number, from around 68 lakh in 2017 to almost 1.4 crore now. The average monthly income has also increased significantly, virtually doubling from about Rs 90,000 crore in the previous fiscal year to Rs 1.69 lakh crore in the current one.

This discovery comes after the GST Network geocoded 1.8 crore addresses of registered firms. Geocoding makes it possible to pinpoint the exact location of registered companies, making it easier to spot fake registrations.

In a few states, the Central Board of Indirect Taxes and Customs (CBIC) has already tested geocoding. Businesses were notified by GSTN on Friday that all states and union territories now have the ability to geocode the address of the primary place of business.