Govt Allows ED to Share Data with GSTN

New Delhi: India made amendments to provisions of the Prevention of Money Laundering Act (PMLA) to enable the Enforcement Directorate (ED) to share information with the GST Network (GSTN). This change aims to aid in the recovery of Goods and Services Tax (GST) evaded through money laundering.

The GSTN serves as the technology backbone for the indirect tax system and holds all GST-related information, such as tax filing, returns, and compliance data. With the inclusion of GSTN in the list of entities under the PMLA, the ED can now share relevant information to track and apprehend high-value tax offenders and ensure they pay their dues.

According to experts, this amendment enables a legal framework to trace potential tax offenders, allowing GSTN to provide information on such individuals to jurisdictional officers for scrutiny, adjudication, and tax recovery. The inclusion of GSTN in the PMLA facilitates mutual sharing of information between the ED and GSTN, especially if there are suspicions of contravening provisions of the GST Act.

Previously, the GST Act empowered the disclosure of information related to any prosecution under different laws, but there was no corresponding provision under the PMLA. Now, with the notification, GSTN has been added to the list of entities, enabling the disclosure of information to GSTN when necessary.

This development is expected to assist the ED in investigating GST evasion cases more effectively. The detailed financial disclosures required under the GST framework can provide valuable information for larger investigations and aid in recovering taxes in cases of significant evasion.

It's worth noting that in November last year, the government authorised the ED to share information about economic offenders with 15 additional agencies, including the SFIO, CCI, and NIA. This expanded the list of agencies with which the ED could share data to a total of 25. With the recent inclusion of GSTN, the list now stands at 26 entities.