Amendments to anti-money laundering law should be rolled back immediately: Punjab FM Harpal Cheema

Punjab finance minister Harpal Singh Cheema on Wednesday said that the central government should immediately rollback the amendments to the anti-money laundering law, allowing GST Network to share info with the Enforcement Directorate.

The Union finance ministry has amended the the Prevention of Money Laundering Act (PMLA) enabling the Goods and Services Tax Network (GSTN) share GST data with the Enforcement Directorate (ED).

According to a state government statement, Cheema said that this step may lead to ''dire consequences'' and a state of ''tax terrorism'' for the honest taxpaying traders.

Cheema said that the Punjab government has also registered a strong opposition on the issue of sharing GST data with ED during the GST Council meeting held at New Delhi on Tuesday.

He said that the Punjab government along with ''other like-minded state governments'' would pressurise the Union finance ministry for the rollback of this ''anti-traders move''.

''ED may misuse the 'new power' in arm-twisting any of the businessmen across the nation. Even a businessman who is paying GST honestly will always be worried that his minor mistake may lead to the exploitation at the hands of ED, and he will not be granted bail if arrested,'' said Cheema while adding that this state of ''tax terrorism'' would adversely affect the economic growth of the country.

He said that this move would also hamper the federal structure of the nation as this would further increase the interference of the Union government in the states.

He said that Punjab and many other states have already set up their own tax intelligence system to keep a vigil over the tax evaders, and are competent enough to monitor the related activities.

Cheema said that Union government should support the states in further strengthening of these systems rather than opting for measures that may lead to the harassment of traders and businessmen, who are the strong pillars of the Indian economy.

Cheema said that Punjab's case for amendment of section 10 of the Integrated Goods and Services Tax (IGST) Act was vociferously argued while identifying the structural imperfection in the Goods and Services Tax (GST) system during the 50th meeting of the GST Council.

Cheema said that the approval of the proposal for the clear definition of place of supply in Business to Consumer transaction (B2C) over the counter supplies in accordance with the principle of destination-based consumption tax was successfully reasoned.

He said that this amendment has been expected to have a strong beneficial impact on the GST revenue of the state.

Taking up the cause of preventing evasion of tax in the scrap sector, Cheema said that the state government proposed a broad-based consultative meeting comprising major stakeholders including representatives of both trade and industry as well as that of tax administration so that suitable pro-active solutions can be envisaged for the said sector.

''Speaking on the issue of taxation of online gaming, the impact it has on the youth of the country and the cause of concern the unregulated mushrooming of this sector can have on the social fabric of the country was highlighted,'' said the Punjab finance minister.

He also said that the state government fervently supported the proposal for taxing online gaming at 28 per cent and the tax to be paid on the face value rather than on the gross gaming revenue.