Finance Ministry officials oppose govt’s GST Network plans

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Officials allege that Infosys was given the contract to prepare computer system for the GST Network while the government itself is capable of putting the system in place.

While the government prepares to bring GST Bill in Parliament this Monsoon Session, it is confronted with a difference of opinion within Finance Ministry on the manner GST’s logistics will be implemented. Top officials have raised strong objection why the project is being given in private hands when government is capable of putting the computer system in place.

Departments within the Finance Ministry are unhappy that government has entrusted private players for evolving a computer system, which will help implement GST in the country.

The seeds of Goods and Services Tax Network (front-end computer), a company formed for this purpose, were sown in 2011-13 during UPA regime when it was decided that a unified computer system network was required to regulate collection of Goods and Services Tax by Centre and states.

With a view a big investment would be required for this purpose the then Government had roped in HDFC Bank Ltd., HDFC Ltd, ICICI Bank Ltd, LIC Housing Finance Ltd, NSE Strategic Investment Corporation Ltd. to invest money for the making of the system. The idea was to impose certain fee which would help private players sustain. These private financial bodies invested an amount of over Rs 5 crore rupees for the purpose.

GOVT TO INVEST RS 3,000 CRORES

Thus the Government entered into an agreement with private players that the former would hold 49 per cent stake and the latter would hold 51 per cent stake in the GSTN company, which will be responsible for making and running of the computer network. The total cost of the project was estimated to be more than Rs 3,000 crores.

However, top official sources in the Finance Ministry say the government has now decided that it will single-handedly be making all future investments required for the project.

‘UNDESERVING BENEFITS’

Infosys has bagged the government contract to prepare the computer system. But the private financial bodies like HDFC and ICICI will continue to enjoy the same equity without making any more investments.

Meaning with merely investing a little over Rs 5 crores, they would be liable for almost equal benefits in the company though the Government will make all the investment in phases. Sources say Expenditure Secretary and Central Board of Excise and Customs officials have raised an objection on this.

Their contention being CBEC has its own computer systems wing, which in the past has been making computer systems required for tax collection. And the department is capable of making the system at a much lower cost than is being incurred by Infosys.

The government plans to push the Constitutional Amendment bill in Rajya Sabha for rollout of GST in the monsoon session starting Monday. The Bill has been approved by the Lok Sabha earlier. The Government is in talks with Opposition parties especially Congress, which had been opposing the implementation of GST it its earlier avatar, to ensure that the bill sails through this Parliament session.

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