Council to take call on turning GSTN into govt entity on May 1

The Goods and Services Tax (GST) Council meeting on May 1 will deliberate on the pros and cons of converting the GST Network (GSTN), the GST’s information technology backbone, into a governmentowned company.

The meeting, to be held via video conferencing, is likely to discuss simplifying return forms and the recent resolution by the authority of advance ruling (AAR) on imposing the GST on duty-free outlets at Indira Gandhi International Airport.

“The Council will meet on May 1 with a limited agenda of converting GSTN into a government company, return simplification and clarity on advance rulings,” said an official in the know.

The Council, chaired by Union Finance Minister Arun Jaitley, will also weigh options of raising the government’s stake in the IT body to 51 per cent from the current 49 per cent. Earlier this month, Finance Secretary Hasmukh Adhia was asked by Jaitley to review whether this was possible.

“A few states have been demanding that GSTN be a government-owned body. With Facebook data leak to Cambridge Analytica, the national security argument is gaining ground now,” said another government official.

Currently, five private institutions — HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance — hold a combined stake of 51 per cent in GSTN, which was incorporated on March 28, 2013. The Centre and respective states hold 24.5 per cent each.

Once the Council gives approval, the Union Cabinet will take up the proposal .

“Discussions on converting GSTN into a government body, per se, should not affect its functioning so long as it continues to be professionally managed,” said Pratik Jain, partner, PwC India.

GSTN Chief Executive Officer Prakash Kumar told Business Standard in an interview that ‘hiring and firing’ was faster here because it was a private company and the private sector salary structure helped it hire the right set of people.

Allaying concerns on information lapses, he stressed confidentiality was embedded in the GSTN structure. “No single person has complete information of a taxpayer. One has registration data, the other has returns data etc. So it will require three persons to collude to get the full data of a taxpayer. Even I cannot see the details of an individual taxpayer,” he had said.

A Group of Ministers, led by Bihar Deputy Chief Minister Sushil Modi, had failed to reach a consensus on simplifying GST return forms in its meeting last week. They would submit a draft with three options for the Council to discuss.