Government considers gaining control over GSTN from private entities


The government is reportedly coming up with a plan to convert the Goods and Services Tax Network (GSTN) into a state-owned organisation. As of now, GSTN serves as the IT infrastructure of the indirect tax regime. According to a senior official in the finance ministry, Union Finance Minister Arun Jaitley has asked finance secretary Hasmukh Adhia to look into the possibility of taking control over the GSTN.


When the GSTN portal was originally launched, the government kept its stake at 49% and allowed private investors to have the remaining 51%. This was done mainly to ensure adequate freedom and flexibility in the operation of the portal. The government also felt the need for private sector participation considering the tight deadline in GST implementation. Moreover, this also allowed the timely implementation of the IT infrastructure.

The portal is now fully operational, and it functions in a stable manner when it comes to tax collection. Since the operation of the portal is stable, the government is now focusing on gaining majority control over the platform from private investors. The formal implementation of the e-way bill system from April 1, 2018 is another significant factor contributing to this move.

GST was implemented by the government from July 1, 2017 onwards, and it replaced various local taxes charged by the central and state governments. Considering the enhanced role of GSTN in tax collection and data analytics, the government now believes that it should be the majority or complete stakeholder in the portal.

As of now, the central and state governments own 24.5% shares in the portal respectively. The remaining 51% is shared between various financial institutions. These stakeholders are HDFC Corp., HDFC Bank, ICICI Bank, LIC Housing Finance, and NSE Strategic Investment Corporation. Since GSTN is a not-for-profit organisation, the shares are likely to be bought back at the original price without any premium.


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