GST Council: Oppn-ruled states raise concern over ED sharing info with GSTN (GSTN under PMLA)

Several opposition ruled states expressed concern over Centre’s decision to allow enforcement directorate (ED) to share information with GST Network, with finance minister of AAP-ruled Punjab Harpal Singh Cheema on Tuesday saying it amounts to ‘tax terrorism’ and scaring small business.

The finance ministry, through a notification, brought in an amendment to the provisions of Prevention of Money Laundering Act (PMLA), 2002, as per which GSTN, which handles the technology backbone of Goods and Services Tax, has been included in the list of entities with which ED will share information.

At the 50th GST Council meeting on Tuesday, Aam-Aadmi Party ruled Delhi and Punjab voiced concerns over the notification and demanded a discussion.

“A lot of finance ministers raised the issue… Delhi, Punjab, West Bengal, Tamil Nadu, Himachal Pradesh, Karnataka, Chhattisgarh, Telangana, and Rajasthan have voiced their concern and said that it should be discussed in GST Council,” Delhi finance minister Atishi told reporters here.

Cheema said several states have demanded a discussion. “The notification would give power to ED to catch any businessman if he/she does not pay GST. “With such decision, tax terrorism will increase in the country and it is dangerous for small businesses and common man.”

Atishi further said since GSTN has been brought under PMLA, it would mean that irrespective of whether you are a small or big business, if you are registered under GST, you can be prosecuted by ED for offences like delay in filing of return.

“We have all seen how ED is being misused to harass and arrest people. Now crores of GST registered businesses and traders will have to save themselves from PMLA prosecution. We are against this notification,” Atishi said, adding if anyone is involved in GST evasion, then he/she should be tied under GST laws.

“If a country wants to increase ‘ease of doing buinsess’ and boost economic growth, we should not scare businesses with ED. A lot of FMs raised the issue. Such a big decision should not have been taken without consulting the GST Council,” Atishi said.