The Union Cabinet on Wednesday cleared a proposal to make the Goods and Services Tax Network a government-owned company. The announcement was made by Finance Minister Arun Jaitley at a Cabinet meeting in New Delhi.
The GST Network is responsible for maintaining the software and the IT system for the GST. It was set up as a private limited company in 2013 under the United Progressive Alliance government. It is a Section 8 company registered under the new Companies Act and is a not-for-profit entity.
In May, the GST Council had agreed to the proposal to make GST Network totally government-owned, with the Centre owning a 50% stake and all the states together holding the remaining 50% on a pro-rata basis, reported PTI. The move came after Jaitley had asked Finance Secretary Hasmukh Adhia to examine such a possibility.
Till now, the Centre and states together held a 49% stake in the GST Network, while the remaining 51% was with five private financial institutions – HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co, and LIC Housing Finance.
The Cabinet approval will pave the way for the GST Network Board to start the process of acquiring the 51% stake held by the private companies. The 11-member board will induct three directors from the Centre and three from the states. Three other independent directors will be nominated by the board, along with the chairman and the chief executive officer.