In suggestions with far-reaching implications, the SIT on black money has recommended amendment of laws to provide for confiscation of domestic property...
In suggestions with far-reaching implications, the SIT on black money has recommended amendment of laws to provide for confiscation of domestic property of those with illicit assets abroad and making tax evasion of over Rs 50 lakh a ‘predicate offence’ taking it as a serious crime.
Constituted on the orders of the Supreme Court, the SIT’s second report to the court made 13 recommendations including making PAN mandatory for all cash and cheque transactions above Rs 1 lakh and imposing a threshold of Rs 10-15 lakh on holding and transporting cash to check unaccounted money to a large extent.
The Special Investigation Team (SIT) also flagged existence of black money in mining, ponzi scheme and iron ore exports as well as money couriers, called ‘Angadias’, dealing in huge sums of money outside the banking system.
The SIT said that making tax evasion of Rs 50 lakh or more a ‘predicate offence’ would allow necessary action under the Prevention of Money Laundering Act (PMLA).
“This would control holding of unaccounted money to a large extent. This would also control transfer of unaccounted cash from one destination to other, which at present is rampant, may be Angadias or by other means,” it said.
The SIT has also suggested setting up of an institutional mechanism to examine mismatch between export/import data with corresponding data of other countries on a quarterly basis to unearth black money.
In case it is found that an individual or entity owns a property abroad in violation of the law, a provision should be made in the FEMA to provide for seizure and confiscation of property of equivalent value within the country.
It also recommended establishment of a central KYC (Know Your Customer) registry to deal with the problem of multiple identities of an individual in financial transactions.
In its suggestions to check black money menace, the SIT cited the examples of European countries to say that there should be a limit on transportation and holding of cash, as per portions of the report released by the government today.
Also, the shipping bills should include the international market price of goods and machinery sought to be exported. “This suggestion is under consideration and is likely to be implemented within short time,” the SIT said.
Besides, there should be a dynamic interaction between different stakeholders like reporting entities, Financial Intelligence Unit and law enforcement authorities.
In cases where ED has attached a property and there are income tax dues to be collected, the SIT said that the former should be open to recovering dues from the attached property.
It also suggested setting up of a central KYC registry to weed out use of multiple identities for financial transactions.
SIT said that at least five additional chief judicial magistrates courts should be set up in Mumbai to deal with 5000 pending IT prosecution cases.
The SIT, which comprises former Supreme Court judges M B Shah and Arjit Pasayat, said Rs 4,479 crore was held in the Swiss bank accounts owned by Indians, who figured on the HSBC list that India had got from the French government.
Besides, the tax department and other agencies including Enforcement Directorate are probing cases involving unaccounted wealth totalling Rs 14,957.95 crore within India, the report said.