Cabinet clears proposal to convert GST Network into government-owned company
Arun Jaitley said that 50 percent stake will be owned by the Centre and the remaining by the states on pro-rata basis in the new structure.
New Delhi: The Cabinet Wednesday cleared a proposal to convert GST Network (GSTN) into a government-owned company, finance minister Arun Jaitley said.
Briefing reporters about the decisions taken in the Cabinet meeting, the finance minister said that 50 percent stake will be owned by the Centre and the remaining by the states on pro-rata basis in the new structure.
Currently, the Centre and states together hold 49 per cent stake in the GST Network, the company that provides IT backbone to the new indirect tax regime. The remaining 51 percent is held by five private financial institutions -- HDFC Ltd, HDFC Bank Ltd, ICICI Bank Ltd, NSE Strategic Investment Co and LIC Housing Finance Ltd.
The proposal to convert GSTN into 100 per cent government-owned company was earlier approved by the all-powerful GST Council.
The GSTN was incorporated as a private limited company on 28 March, 2013 under the UPA government. It is a Section 8 company under the new Companies Act and hence is a not-for-profit entity.
While one sub-group will examine the business process, policy and legal aspects for generation of e-invoice, the other will recommend technical aspects for its roll-out
More dangerous is the potential conflict of interest as all these banks and financial institutions are themselves taxpayers under the GST regime
Stating that the present equity structure of GSTN is "anti-national", Swamy had urged the Prime Minister to ensure it is replaced by a government-owned structure