The GST Network (GSTN) has been placed within the scope of the Prevention of Money Laundering Act (PMLA) in an effort to stop tax evasion via fraudulent invoicing.
This will provide the anti-money laundering Enforcement Directorate (ED) additional authority to combat GSTN tax evasion.
In order to aid in these types of investigations, the government announced via a gazette notice the sharing of information between ED and GSTN under the Prevention of Money Laundering Act, 2002 (PMLA).
The notification relates to information exchange between ED and GSTN in accordance with PMLA section 66(1)(iii).
In order to stop tax evasion, the Central Board of Indirect Taxes and Customs (CBIC) has been optimistic.
Vivek Johri, the chairman of the CBIC, said last month that the government is serious about putting a stop to the practise of fraudulent billing and fake invoicing as well as identifying phoney enterprises.
To combat drug trafficking and terrorism financing, the PMLA was passed.
In order to check for any infractions of the GST regulations, the notice would now make it easier for ED and GSTN to share information or material that they have in their possession.
