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The International agreements used by the government to justify the #Aadhaar- #PAN linkage under #FATCA ( https://home.treasury.gov/policy-issues/tax-policy/foreign-account-tax-compliance-act) and CRS ( https://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/). | @AnupamSaraph @sanjana_krishn
The agreement to improve international tax compliance and to implement the Foreign Account Tax Compliance Act ( #FATCA) was signed by Shaktikanta Das (now Governor, RBI) and Richard Verma, the then US Ambassador to India https://www.treasury.gov/resource-center/tax-policy/treaties/Documents/Understanding-India.pdf | @AnupamSaraph @sanjana_krishn
India is signatory to the OECD Tax CRS from September 2017 https://www.oecd.org/tax/automatic-exchange/about-automatic-exchange/crs-mcaa-signatories.pdf, after the Binoy Viswam judgement on June 9th 2017. | @AnupamSaraph @sanjana_krishn
The #PAN identifies the transactions of individuals or organizations (Binoy Viswam v UoI and Ors 2017: p 75, para 58[a]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn
![The #PAN identifies the transactions of individuals or organizations (Binoy Viswam v UoI and Ors 2017: p 75, para 58[a]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn](https://pbs.twimg.com/media/ElQacPyUUAYj38a.png "The #PAN identifies the transactions of individuals or organizations (Binoy Viswam v UoI and Ors 2017: p 75, para 58[a]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn")
Quoting of #PAN has been mandated for certain transactions above specified threshold value in Rule 114B of the Rules (Binoy Viswam v UoI and Ors 2017: p 75, para 58[b]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn
![Quoting of #PAN has been mandated for certain transactions above specified threshold value in Rule 114B of the Rules (Binoy Viswam v UoI and Ors 2017: p 75, para 58[b]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn](https://pbs.twimg.com/media/ElQagZWVkAAD-_f.png "Quoting of #PAN has been mandated for certain transactions above specified threshold value in Rule 114B of the Rules (Binoy Viswam v UoI and Ors 2017: p 75, para 58[b]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn")
The govt further argued that “for achieving the objective of one #PAN to one assessee, it is required to maintain the uniqueness for each PAN” (Binoy Viswam v UoI and Ors 2017: p 76, para 58[c]). The govt implicitly admits that PAN is a unique number. https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf
![The govt further argued that “for achieving the objective of one #PAN to one assessee, it is required to maintain the uniqueness for each PAN” (Binoy Viswam v UoI and Ors 2017: p 76, para 58[c]). The govt implicitly admits that PAN is a unique number. https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf](https://pbs.twimg.com/media/ElQay6dUwAAqTzn.png "The govt further argued that “for achieving the objective of one #PAN to one assessee, it is required to maintain the uniqueness for each PAN” (Binoy Viswam v UoI and Ors 2017: p 76, para 58[c]). The govt implicitly admits that PAN is a unique number. https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf")
The government also assumed that because Aadhaar deduplication relied on biometric attributes of fingerprints and iris images, the Aadhaar database had no duplicates (Binoy Viswam v UoI and Ors 2017: p 77, para 58[d], [e]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn
![The government also assumed that because Aadhaar deduplication relied on biometric attributes of fingerprints and iris images, the Aadhaar database had no duplicates (Binoy Viswam v UoI and Ors 2017: p 77, para 58[d], [e]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn](https://pbs.twimg.com/media/ElQa3iFVMAInade.png "The government also assumed that because Aadhaar deduplication relied on biometric attributes of fingerprints and iris images, the Aadhaar database had no duplicates (Binoy Viswam v UoI and Ors 2017: p 77, para 58[d], [e]) https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf | @AnupamSaraph @sanjana_krishn")
The argument in 58(d) is incorrect and flawed as #Aadhaar is not a certified document as UIDAI has confirmed that it does not certify the identity, address, dob, resident status or even existence of any individual, or know the documents on which the information is based.
The UIDAI has also confirmed that the #Aadhaar does not have unique biometrics in each record as it cannot retrieve a unique record with a biometric. | @AnupamSaraph @sanjana_krishn
It is, therefore, curious to propose the use of a non-unique, uncertified, #Aadhaar that cannot identify anyone ( https://arxiv.org/ftp/arxiv/papers/1806/1806.04410.pdf) in place of a unique #PAN. | @AnupamSaraph @sanjana_krishn
Furthermore #Aadhaar numbers were also allotted using #PAN as a proof of identity, so if a fake PAN was used to obtain Aadhaar, linking Aadhaar cannot distinguish fake PANs from genuine ones. | @AnupamSaraph @sanjana_krishn
Sec #139AA, therefore, also allows the same individual to hold multiple #PANs by holding multiple #Aadhaars and makes real the possibility of diverting personal income into several PANs, resulting in tax evasion. | @AnupamSaraph @sanjana_krishn
A #PAN created with #Aadhaar or linked to Aadhaar transfers the creation and updation of demographic and biometric data to private organisations and by processes that are not controlled, certified, verified or audited by the CBDT. | @AnupamSaraph @sanjana_krishn
Using an #Aadhaar to create or validate a #PAN, therefore, makes it impossible to establish the identity of the person holding a financial instrument or undertaking a financial transaction. | @AnupamSaraph @sanjana_krishn
Once Aadhaar is linked to financial instruments, it also enables money transfers using Aadhaar payment systems that make money transfers volatile, untraceable, facilitating money-laundering (thread on money laundering with Aadhaar: https://threadreaderapp.com/thread/876685753375436800.html)
The increase in #PAN numbers linked to Aadhaar, or the use of Aadhaar authentication, creates a false aura of identification, while facilitating and legitimizing money-laundering through millions of shell PANs. | @AnupamSaraph @sanjana_krishn
With the introduction of Sec #139AA, millions of shell #PANs can be used for parking black money and bribes, siphoning subsidies, making fake insurance claims, asset transactions, and fake borrowing, and yet remain untraceable. India will have replaced Panama as a tax haven.
If the ministry intended the Aadhaar– #PAN linkage to be a means to meet its #FATCA and #CRS obligations to the US Treasury and OECD as it stated to the Supreme Court (Binoy Viswam v Union of India and Ors 2017), it has created exactly the opposite effect. https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf
Contrary to the government’s claims, #Aadhaar linkage will generate incorrect or fictitious #PANs and cause incorrect reporting to US Treasury and OECD that it wanted to avoid to comply with FATCA and CRS (Binoy Viswam v UoI and Ors 2017). https://www.uidai.gov.in/images/Pan-Aadhaar_Linking.pdf
To protect the integrity of the financial system and ensure that it meets its reporting obligations to US Treasury under FATCA and OECD under CRS the government will need to end the use of #Aadhaar for financial transactions and issuing any identification documents.
To ensure that justice, dignity, and financial integrity of every person and the state are protected in India, there is no option but to delete Section #139AA and all acts and rules that have notified the use of #Aadhaar. | @AnupamSaraph @sanjana_krishn
The prima facie evidence presented is also enough to warrant an investigation into the generation of #PAN solely on the basis of #Aadhaar and the transactions undertaken with these PAN cards and the RBI directive regarding re-KYC. | @AnupamSaraph @sanjana_krishn
There are sufficient grounds to require a thorough investigation of how third parties, like UIDAI, have ended up diluting the role of financial bodies and removing any clarity of legal responsibility absolving them of legal liabilities without taking on any legal liability itself
MoF also needs to urgently create a mechanism whereby its basic role and responsibilities, and those of CBDT or RBI, will not be outsourced or taken over by third parties, like the UIDAI, that have no similar and symmetrical consequences for fraud. | @AnupamSaraph @sanjana_krishn
MoF cannot absolve its responsibility to be accountable, to protect the country’s financial databases, to protect the financial system, and the people of India. | @AnupamSaraph @sanjana_krishn
The curious case of the #Aadhaar– #PAN linkage has deep lessons of how trojan horses can take over and destroy the financial integrity of an entire nation. | @AnupamSaraph @sanjana_krishn
Read the entire article: https://www.epw.in/journal/2020/35/special-articles/curious-case-pan%E2%80%93aadhaar-linkage.html | @AnupamSaraph @sanjana_krishn
In case you missed it: you can ask questions and view their responses in this thread: https://twitter.com/epw_in/status/1320703878355013634?s=20
