GSTN to be converted to govt entity

The GST Council today approved converting the firm providing IT backbone to the Goods and Services Tax (GST) into a government owned entity from being a private company.

BJP MP Subramanian Swamy, who had for months questioned the private equity structure of GST-Network (GSTN), demanded transfer of Finance Secretary Hashmukh Adhia to a lesser important ministry for his alleged role in the "GSTN scam".

After the GST Council meeting, Finance Minister Arun Jaitley, who had for months defended the equity structure of GSTN, said he had proposed to the panel for a change in the structure of GSTN which was accepted.

He said the central government currently holds 24.5 per cent stake in GSTN and state governments collectively hold an equivalent stake. The remaining 51 per cent is held by five financial institutions.

Jaitley said the Council was agreed that the 51 per cent equity held by private entities should be taken over by the government and "eventually the central government will hold 50 per cent and state governments (together) will hold 50 per cent".

He said the collective share of state governments will be pro rata, divided among states in accordance with their GST ratios.

"While doing so the council also recommended that the GSTN will continue to employ people contractually and have the flexibility to get the best talent from the market considering the wide range of activities and the responsibilities of GSTN itself," Jaitley said.

Swamy, who had repeatedly questioned the shareholding pattern in the GSTN, terming it "a shady organisation" that was a "grave security" issue, tweeted soon after the decision was announced : "I demand the Finance Secretary Adhia be transferred to another Ministry like Textiles for his role in GSTN scam."