Taxmen red-flag GSTN, say GST data with corporates could compromise national security

They say that taxation is a sovereign function of the State so the execution of sovereign function should not be given to a private body without having complete government control.

With more than 60 per cent work completed on Good & Services Tax Network, which is slated to roll out GST in April next year, Indian’s top revenue officials have warned putting GST data in the private hands in GSTN could jeopardise the national security and corporate interests. Various corporate bodies have also expressed similar sentiments.


Sources say top Indian Revenue Service officials have red flagged the possibility of national security data and corporate secrets being compromised in Goods & Services Tax Network. They have given a representation in this regard to the Central Board of Excise and Customs and Department of Revenue.

They said that taxation is a sovereign function of the State so the execution of sovereign function should not be given to a private body without having complete government control.  A CII official said, “The matter was taken up with the Ministry of Finance, which has assured us there will no breach in data security. The Department of Revenue has given an assurance and said there has been no precedent of data being stolen from Ministry of Finance.”


GSTN is a special utility body started by the government to regulate GST. However in the corporate structure of GSTN, government holds only 49 per cent equity. The remaining 52 per cent is in the hands of private organisations such as HDFC, ICICI, LIC Housing Finance Ltd and others. Though there are talks that government is trying to own the majority stake in the equity.


However, in the present scenario the concern is that even private employees working with GSTN will have access to highly confidential government and corporate data including vital statistics of key establishments. They say the data will be concerned with the national security and giving access to the data will also be a violation of the Official Secrets Act.

Chairman GSTN Navin Kumar told India Today Group, “An eight-tier security mechanism will be in place. World’s best tools and software for data security are being deployed for protection. From day one we are aware GSTN will be an attractive target for disruption since it’s a stand-alone system. We have focussed our attention on this aspect. Only authorised persons will have access to the data.”


GSTN officials say large number of VAT, Service Tax, Income Tax data is being handled by private companies like TCS, Wipro, Infosys. They have kept the data secure.

However the counter view is GSTN will be recording all transactions and indirect taxation liabilities of corporate bodies and those associated with the government. For example, it will also have data related to HAL, matters related to taxation in the manufacturing or repair of defence equipment such as Arjun tank, INS Vikrant and Sukhoi.

The contention of the IRS lobby is that a number of private employees will be working in GSTN tomorrow might start working for another private company. They will be privy to the confidential data of all the corporate houses. There have been incidents of date theft in the past in various private organisations. The data thus stolen could be sold and misused. The present system will be conducive for corporate espionage.

In spite of confidential clauses, chances of leakages of secrets relating to security, trade and commerce of the country cannot be ruled out. Shravan Kumar Bansal, General Secretary of Indian Revenue Service Officers Association said, “Government has been apprised of this apprehension and they have assured that all loopholes will be plugged. We hail the government as it has reacted positively and assured of remedial measures as we are all working in the interest of the country.”

When Infosys was contacted for their view, their spokesperson Sarah said, “Since the project is underway we will not comment on the issue.” Sources said GSTN will start transferring data of entities already enlisted for VAT, Service Tax by the end of next month.


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