“The Prevention of Money Laundering Act has nothing to do with GST law. The notification to bring GSTN information under PMLA will empower our agencies with more information on tax evasion which they were not getting earlier," said Revenue Secretary Sanjay Malhotra.

GSTN handles the technology backbone of the indirect-tax regime and is the repository of all GST-related information, including return, tax filing and other compliances. According to the amendment to the PMLA provisions GSTN has been included in the list of entities with which the ED will share information.

"A large proportion of traders do not pay GST -- some out of compulsion, some intentionally. A few days ago, the Centre also brought the GST within the purview of the ED. It means that now, if a businessman does not pay the GST, the ED will arrest him directly and bail will not be granted," Kejriwal alleged in a recent tweet.

He alleged that even those paying GST could be put behind bars under some provisions. “This means that any businessman can be sent to jail whenever the Centre wants. This is extremely dangerous," the CM added.

Several other opposition ruled states have also expressed concern over the move. Harpal Singh Cheema - the finance minister of AAP-ruled Punjab - said on Tuesday that it amounts to 'tax terrorism' and scaring small business.

"We will oppose this anti-trader policy of the Modi government, as this endangers millions of traders who are at the receiving end of a complicated GST regime," added Congress leader Pawan Khera.