DGGSTI to now check money laundering in gems and jewellery sector

The Dollar Business Bureau 

The Directorate General of Goods and Service Tax Intelligence (DGGSTI), the newly created intelligence arm of GST, has been named as the ‘regulator’ for handling cases of money laundering in the gems and jewellery sector.

Last week, the Finance Ministry in a notification had amended the Prevention of Money-Laundering (Maintenance of Records) (PMLA) Rules, 2005 and made DGGSTI a regulator for the gems and jewellery sector.

Under the PMLA Act, the regulator issues rules and recommends measures to establish the identity of the client in different dealings.

The regulator may prescribe increased or simplified measures for verifying the identity of client after considering the client’s type, business relationship, value and nature of the transactions based on risks involved related to overall laundering of money and financing for terrorist activities.

Under the new PMLA rules, every reporting enterprise is required to keep records of all the dealings of more than Rs.10 lakh value, all cross-border wire transfers of over Rs.5 lakh and all sale and purchase of Rs.50 lakh or more worth of immovable property.

With the latest notification, the DGGSTI will keep a check on the transactions of the gems and jewellery sector to see if these are compliant with the law.

According to experts, this is likely to provide power to the DGGSTI equivalent to the Sales Tax officers, who can go to shops for checking money laundering related issues.

DGGSTI, which was earlier known as the Directorate General of Central Excise Intelligence (DGCEI), is an apex intelligence organization under the Central Board of Excise & Customs (CBEC), entrusted with the task of checking central excise duty and service tax evasion.

With the rollout of GST from July 1, the Government has given powers to the DGGSTI to check evasion of excise duty and service tax by using its intelligence network all over the country. It also informed the field formations regarding the latest trends in tax or duty evasion.

During the previous financial year 2016-17, the DGCEI had detected Rs.15,047 crore worth of tax evasion cases.