'Tax terrorism': Non-BJP states slam move to allow ED access to info on GSTN

Several opposition-ruled states expressed concern over Centre’s decision to allow Enforcement Directorate (ED) to share information with GST Network, with Punjab Finance Minister Harpal Singh Cheema on Tuesday (July 11) saying it amounts to tax terrorism and scaring small business.

The Union Ministry of Finance, through a notification, brought in an amendment to the provisions of the 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.

Explainer: GSTN now under purview of PMLA; what does this mean for ED, others?

At the 50th GST Council meeting on Tuesday (July 11) in Delhi, 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 in Delhi.

Concerns raised

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.”

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Atishi further said that 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. If anyone is involved in GST evasion, then he/she should be tried under GST laws, she added.

“If a country wants to increase ease of doing business 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.

(With agency inputs)