Change in the Share Holding of the GSTN

Change in the Share Holding of GSTN

A press release was regarding the change in shareholding of the GSTN. In which the government decided to acquire the remaining share from the private company. Currently, there is 51% shares are held by the private sector/companies.  The Government will acquire those shares and distribute them to the Central and states government. It is mentioned in the press release that the 51% shares of the GSTN may cost the government 5.1 Crore rupees.

Here is the press release for your reference:- 

Download the press release: CBIC Press Release

Change in the Share Holding of GSTN

The Goods and Services Tax Network – Special Purpose Vehicle (GSTN-SPV) was created as a private limited, not-for-profit company under Section 25 of the Companies Act, 1956 (Section 8 of the Companies Act, 2013) by Govt. of India on 28th March, 2013 with an objective to provide shared IT infrastructure and services to Centre and States Governments, taxpayers and other stakeholders for implementation of Goods and Services Tax (GST) in the country. Presently, the Central Government and State Government are holding 24.5% equity shares respectively and the remaining 51% is held by non-Governmental institutions and through various mechanisms, GSTN is under strategic control of the government. Majority of the GST processes including registration, the filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports. Considering the nature of ‘state’ function performed by GSTN, Council felt that GSTN is converted into a fully owned government Company. 

In view of the above, Council decided:

Acquisition of entire 51% of equity held by the Non-Governmental Institutions in GSTN amounting to Rs. 5.1 crore, equally by the Centre and the States governments and allow GSTN Board to initiate process for acquisition of equity held by the private Companies; and GSTN Board shall be allowed to continue the existing staff at existing terms and conditions for the period up to five years, and shall have the flexibility of hiring people through contract on the terms and conditions similar to those used by GSTN till now while hiring regular employees.

The existing financial commitments given by Centre and States to GSTN to share the capital and O&M cost of the IT Systems shall continue.