GSTN: “Should be State-Owned” Finance Ministry Pondersby Opinion Express April 11, 2018 0 comments
The Finance Ministry is considering to convert GSTN into a company that would be state owned. This move may be made to take complete control over the GSTN or GST Network. According to sources privy to development, Finance Minister Arun Jaitley has asked Finance Secretary Hasmukh Adhia to examine the possibility of converting GSTN into a majority government company or a 100 percent government-owned company.
At present, in the GST Network that handles the IT infrastructure of the new indirect tax regime, some private financial institutions are having the majority stake of 51 per cent stake, while the centre and states together hold only minority state of 49 per cent.
When contacted to a senior official in the Finance Ministry, he said, “This proposal is in the discussion stage. The proposed suggestion will go the GST Council which can take the final call after holding talks with all states. The Government is now thinking of hiking its stake in the company as the portal has been fully operationalised with stability in tax collection and implementation of e-way bill.”
“I think this move will help the Government in collecting tax when all states will start operating e-way bill,” he added.
However, the source further added that the government kept its stake in GSTN at 49 per cent and incorporated it as a private company to allow adequate flexibility and freedom to GSTN to ensure timely implementation of the IT infrastructure prior to the GST rollout.
Goods and Services Tax (GST), which subsumed over a dozen local taxes, was rolled out on July 1, 2017. “The Government believes it should be a majority owner considering GSTN’s enhanced role from just collecting tax to data analytics,” it said.
GSTN was incorporated as a private limited company on March 28, 2013 under the UPA government. Non-government financial institutions namely HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd hold 51 per cent stake in GSTN. Over one crore businesses are registered on the GSTN portal.
BJP MP Subramanian Swamy had earlier on multiple occasions raised concerns over GSTN’s shareholding pattern, and said it might compromise data security.
Swamy had written to Prime Minister Narendra Modi in August 2016 asking him to give a close second look into the shareholding pattern and questioned how a private entity can be allowed access to sensitive information without security.
Writer: Madhusudan Sahoo
Courtesy: The Pioneer