Cabinet approves conversion of GSTN into government entity

The Union Cabinet has approved conversion of Goods and Services Tax Network (GSTN) into government-owned company. Government will now own 100% of GSTN which is IT backbone to GST regime. Majority of Goods and Services Tax (GST) processes including registration, filing of returns, payment of taxes, processing of refunds is IT driven and mainly through GSTN.

Background

Earlier in May 2018,  GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state finance ministers had agreed to make GSTN a government company with Centre owning 50% stake and states together holding the remaining 50%. Over 1.1 crore businesses are registered on GSTN portal. With enhanced role of GSTN from just collecting taxes to data analytics, Government had felt that it should now be the majority owner in the IT backbone provider.

Goods and Services Tax Network (GSTN)

GSTN was set up as not for profit, non-Government, private limited company in 2013. It was established primarily to provide IT infrastructure and services to Central and State Governments, tax payers and other stakeholders for implementation of Goods and Services Tax (GST).
Currently, Centre and states together hold 49% stake (24.5% each) in GSTN. The remaining 51% is owned by five private financial institutions- ICICI Bank, NSE, HDFC Ltd, HDFC Bank and LIC Housing Finance Ltd. Its revenue model after GST was rollout out consisted of User Charge to be paid by stakeholders who will use the system and making it self-sustaining organization.

Month: Current Affairs - September, 2018