Cabinet Okays Conversion of GST Network into Government Entity
With recommendations of the Union Cabinet, the government has recently called the Goods and Service Tax Network (GSTN) to go for procedural conversion of its constituency to a full-fledged government-owned company. With the proposed announcement government will now own 100% stake of GSTN with its complete IT backbone. GST in economy was rolled on 1st July 2017, which subsumed over dozen of indirect taxes. Earlier it was staked to Central and State government to share 49%(24.5% each) in GSTN control over the company while the remaining 51% was sufficed to privately owned institutions like ICICI Bank Ltd, LIC Housing Finance Ltd etc for providing a privately owned financial corporate support background.
Briefing the announcement to media, Union Finance Minister Arun Jaitley said ‘the government will now own 100% ownership to the new tax regime taking in its complete IT background ’. Further stating the minute points of the GST council chaired by him and all the State finance ministers he stated his assent on the proposal of fractioning the GSTN ownership of 50% to the Center and the remaining 50 % as a sum to all states holding each stake in equal out of the remaining 50%.
Quoting the regulatory changes required in the process, finance minister Arun Jaitley further said ‘ A few months ago we are in a principal decision of making it a 100% government-owned entity, while the GST Council already approved the concern and we are ready to move ahead as the Cabinet has now approved it too..’.
GSTN as a semi owned government company was incorporated on March 28, 2013, under proposed provisions of the previous UPA government. Incorporated as a non-profit entity, it got criticism from major state ventures and authorities for its structural stake in private companies. Earlier, it was felt that private inclusion in the company would bring more flexibility in working of all procedures and will add operational freedom in the system. Even at the initiation of the official GST portal, GSTN faced several criticisms related to crashes and difficulties in filing returns. With improvements made and lining it into a lenient running system, the government has called the present time to be very right for changing the ownership.