News

Published: July 8, 2023
Updated: July 8, 2023

Government Strengthens Anti-Money Laundering Measures by Including GST Network under PMLA

In a significant move, the Indian government has brought the Goods and Services Tax Network (GSTN) under the purview of the Prevention of Money Laundering Act (PMLA). This decision allows for the sharing of information stored on GSTN under the PMLA Act, enabling stricter actions against tax evasion and document manipulation.

Enhanced Measures Against Tax Crimes:

By incorporating GSTN into the PMLA Act, the government can now seek information related to the GST network. This development ensures that offences such as fake input tax credit and fake invoices within the GST system will be covered by the provisions of the PMLA Act.

Understanding the Prevention of Money Laundering Act (PMLA):

The PMLA is a crucial legislation designed to combat money laundering activities. Its objectives include preventing money laundering, enabling the confiscation of properties involved in money laundering, and addressing related matters.

The Role of GSTN in the Implementation of GST:

The government established the Goods and Services Tax Network (GSTN) as a robust IT network to support the implementation of the Goods and Services Tax (GST). GSTN serves as a shared IT infrastructure, catering to the needs of the central and state governments, taxpayers, and other stakeholders. It performs various functions, such as registration facilitation, forwarding returns to authorities, computation and settlement of IGST, and matching tax payment details with the banking network.

Impact on Compliance and Small Traders:

GSTN also aims to simplify compliance, particularly for small traders. It provides standard software that enables traders to maintain their accounts and easily upload monthly returns on the GSTN website. This measure streamlines the reporting process for small traders and promotes greater compliance with GST regulations.

The government's decision to include the GSTN under the PMLA Act demonstrates its commitment to combatting financial crimes, particularly those related to tax evasion and money laundering. By enabling the sharing of information and expanding the scope of the PMLA Act to encompass GST-related offenses, the government reinforces its efforts to ensure a transparent and accountable taxation system in the country.