GST offences under PMLA Now: Government has brought Goods & Services Tax Network (GSTN) under Prevention Of Money Laundering Act (PMLA). Now, GSTN Data and Information can be shared under the PMLA. Therefore, GST offences like taking fake input tax credits, fake invoices, etc will be covered in the PMLA. PMLA has very harsh provision regarding custody attachment and imprisonment. This will help in curbing Tax evasion in the country.
Money Laundering basically is knowingly dealing with proceeds of crime, directly or indirectly. In common terminology, money laundering is understood as converting black money or Number Two money into white money or Number One money.
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Offences under PMLA
Serious offences under IPC like murder, culpable homicide, voluntary causing hurt to extort property or a valuable security, kidnapping for ransom, extortion, forgery, counterfeiting currency notes or bank notes are included in part A of Schedule to Prevention of Money Laundering Act.
False declaration, false documents etc. as specified in section 132 of Customs Act is included in part B of Schedule to Prevention of Money Laundering Act.
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Punishment for offence under Prevention of Money Laundering Act
The punishment for offence of money laundering shall be imprisonment upto seven years (minimum three years) [up to 10 years in case of offences relating to narcotics drugs] and fine [section 4 of Prevention of Money Laundering Act].
In addition, the tainted property will be confiscated to Central Government, if Special Court finds that money laundering has taken place. [section 8(5) of Prevention of Money Laundering Act].
Note that the person who has actually committed the offence will be punished as per provisions of that particular Act also.
The punishment specified in the Prevention of Money Laundering Act is only to person who was involved or who assisted in converting tainted money into untainted money.
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GST offences under PMLA Notification
The text of full notification is as follows:
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 7th July, 2023
G.S.R. 491(E).—In exercise of the powers conferred by clause (ii) of sub-section (1) of section 66 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government, being satisfied that it is necessary in the public interest to do so, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance, Department of Revenue, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 381(E), dated the 27th June, 2006, namely:-
In the said notification, after serial number (25) and the entry relating thereto, the following serial number
and entry shall be inserted, namely:-
“(26) Goods and Services Tax Network.”
[F. No. P.12011/2/2009-ES Cell-DOR] SHASHANK MISRA, Director (Hqr.)
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