GSTN, incorporated on March 28, 2013, is a not-for-profit, non-government, private limited company.
The Empowered Committee of State Finance Ministers in their meeting on Tuesday raised concerns regarding the financial accountability of GSTN (Goods and Services Tax Network), the IT backbone for GST rollout, and discussed various funding models for it. While some states favoured borrowing from banks, others wanted a contributory corpus for the company.
One of the models discussed for creating the corpus included having funding by Centre and the states. The other model discussed by states favoured borrowing from banks and then paying interest rates, whose burden can then be shared between the Centre and states.
Committee’s chairman and West Bengal finance minister Amit Mitra said GSTN is the software based non-profit entity, which has been meeting the empowered committee for two-and- half-years.
“Still there are some operational issues which are to be sorted out. The GSTN has been sharpening its capacity to handle the complex tax as GST,” he said.
Delhi’s deputy chief minister and finance minister Manish Sisodia said that it should not happen that GSTN becomes an independent company which just keeps taking funds from the Centre and the states and spends as per its own wishes without any accountability.
“Major concern is that GSTN’s accountability, deliverables should be clear to the states and to GSTN. Its financial model was decided today and every one was in consensus that both Centre and states should contribute,” he said.
GSTN, incorporated on March 28, 2013, is a not-for-profit, non-government, private limited company. The Government of India holds 24.5 per cent equity in GSTN and all states of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers, together hold another 24.5 per cent. The remaining 51 per cent equity is with the non-government financial institutions.
The company has been set up primarily to provide IT infrastructure and services to the Central and state governments, taxpayers and other stakeholders for implementation of the Goods and Services Tax.