CABINET CLEARS PROPOSAL TO MAKE GSTN 100 PER CENT GOVT- OWNED COMPANY
05, Sep 2018
Prelims level : Indian Economy Mains level :
Why in news?
- The Union Cabinet has cleared a proposal to convert the GST Network into a government- owned company, finance minister Arun Jaitley
- A few months ago, an in-principle decision was taken to make it a 100% government- owned entity. The GST Council has already approved the move. Now the cabinet has approved it.
- The restructured GSTN, with 100 per cent government ownership, shall have equity structure between the Centre (50 per cent) and the states (50 per cent).
- Currently, the Centre and the states together hold a 49% stake in the company, which provides the IT backbone to the indirect tax
- The remaining 51% is held by five private financial institutions – HDFC, HDFC Bank, ICICI, NSE Strategic Investment Co and LIC Housing Finance. The stake of the private companies will be acquired by the Centre and the state
- GSTN was incorporated as a private limited company on March 28, 2013, under the previous UPA government. It is a not-for-profit
- There had been criticism about allowing private companies to hold a majority stake in GSTN and demands to change its
- However, it was then felt that private sector participation in the company would provide it with flexibility in hiring and operational
- GST, which replaced multiple state and central taxes with a single levy, was rolled out across the nation on July 1 last
- GSTN faced widespread criticism after the portal crashed several times and businesses found it difficult to file returns. With the portal stabilising, the government said the time was right to change the