11 July
Gold and Silver news
Something relevant shared by a lawyer and friend
There is a misapprehension going around in the social media that GST offence has become money laundering offence by the virtue of notification dated 7th July issued under Section 66 of the PMLA Act, 2002.
However the reality is that it is the GSTN which has been included in PMLA not GST. The latest notification has only added GSTN for the purpose of sharing of mutual information between ED and GSTN.
Offences under GST is not yet predicate/Scheduled offences to be considered as money laundering offence.
The offence under PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence.
The Authorities under the PMLA Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum.The offence under PMLA is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence.
The expression “money-laundering”, ordinarily, means the process or activity of placement, layering and finally integrating the tainted property in the formal economy of the country.
However, section 3 of the PMLA Act, 2002 has a wider reach. The offence, as defined, captures every process and activity in dealing with the proceeds of crime, directly or indirectly, and not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money-laundering.
Every process or activity connected with the proceeds of crime such as knowingly concealing, possessing, acquiring or using of proceeds of crime, directly or indirectly
results in offence of money-laundering.
It is only when money is generated as a result of any of scheduled offence that the 2002 Act steps in to initiate the process of confiscation of property as well as criminally prosecute the perpetrator of offence of money laundering.
Criminal prosecution under PMLA is in addition to prosecution under IPC or any other special law for commission of any scheduled offence.
Offences prescribed under the schedule to PMLA, 2002 are specific offences under certain Acts. As per schedule to PMLA the Acts which are covered includes IPC, NDPS Act, Companies Act, Explosive Substances Act, UAPA Act, Arms Act, Wildlife, Immoral Traffic (Prevention) Act, Prevention of Corruption Act, Explosives Act, Antiques and Art treasures Act, Customs Act, Bonded Labour, Child Labour, Juvenile Justice, Emigration, Passports, Copyrights, Trademarks, Biological Diversity, Protection of plant varieties and farmerâs rights, Environment protection Act, Water / Air pollution control etc.
However offences under GST or Income Tax Act are not yet scheduled offence.
Caveat: If a seperate FIR is registered under IPC for offence under GST or IT Act than it was already covered within the purview of PMLA.
– Nitin kedia
