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Examine possibility of converting GSTN into govt-owned firm: FM to Adhia

The move came after there were reports of leakages of data, including those allegedly by Facebook and Cambridge Analytica

Indivjal Dhasmana  |  New Delhi 

GST

Ten months into the (GST), the Centre is looking at converting Network (GSTN), a company managing the IT infrastructure of the indirect tax system, into a government-owned company to protect the sensitive data of companies.

Finance Minister has asked Finance Secretary to “examine the possibility” of converting into a company in which the government holds a majority stake, which can go up to 100 per cent.

The move came after there were reports of leakages of data, including those allegedly by Facebook and

After examination, the proposal may be sent to the Council.

Currently, the Centre and the states hold 24.5 per cent each in The rest is held by banks and financial institutions — LIC Housing Finance, HDFC, HDFC Bank, ICICI Bank and NSE Strategic Investment Co Ltd.

Earlier, a select committee of the Rajya Sabha, set up to examine the Constitution Amendment Bill, 2014, had recommended immediate steps by the government to ensure that the shareholding of non-government financial institutions be limited to public sector banks or public sector financial institutions.

The Committee said would play a crucial role in the implementation of the by providing it the IT infrastructure. It noted the non-government shareholding of is dominated by private banks. “This is not desirable because of two reasons. First, public sector banks have more than a 70 per cent share in credit lending in the country. Secondly, GSTN’s work is of strategic importance to the country and the firm would be a repository of a lot of sensitive data on business entities across the country,” the committee had said.

Examine possibility of converting GSTN into govt-owned firm: FM to Adhia

The government then had turned down the suggestion. Jaitley had stoutly defended keeping as a private entity. Now the government is thinking of hiking its stake in the company because the portal has been fully operationalised with stability in tax collection and the implementation of the e-way bill.

Sources said the government kept its stake in at 49 per cent and incorporated it as a private company to "allow adequate flexibility and freedom" to According to a source, the government said it should be the majority owner, considering GSTN's role expanding from tax collecting to data analytics.

M S Mani, partner, Deloitte India, said the proposed changes in the shareholding structure of could have been prompted by the recent cases of unauthorised data usage.

"It is essential to keep the data secure as very sensitive information relating to sales, purchase and pricing is required to be submitted as part of the return-filing process," he said.

Pratik Jain, partner, PwC, said making a government entity would not affect its functioning.

Another expert said was, for all practical purposes, a government company though the government owned less than 51 per cent.

reports to the Council, which is a government body,” he said.

First Published: Wed, April 11 2018. 01:27 IST
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