The 51 per cent equity will be acquired collectively by both Central and state governments following which they will hold 50-50 share in the private limited, not-for-profit company created to provide shared IT infrastructure and services for implementation of Goods and Services Tax (GST).
Finance Minister Arun Jaitley said the collective share of the states will be pro-rata divided among them according to their contribution to the GST revenue.
A majority of the GST processes including registration, filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports.
"Considering the nature of 'state' function performed by GSTN, the Council felt that GSTN be converted into be a fully-owned government company," an official statement said.
Following the acquisition, however, the GSTN Board would continue to hire people on contractual basis on the terms and conditions similar to those used by GSTN till now, Jaitley announced after the 27th meeting of the GST Council here.
The GSTN Board would also be allowed to continue the existing staff at existing terms and conditions for the a period up to five years.
"The existing financial commitments given by the Centre and states to GSTN to share the capital and operation and maintenance cost of the IT Systems shall continue," it added.
Presently, the Central government holds 24.5 per cent equity shares while the state governments collectively hold another 24.5 per cent. The remaining 51 per cent are held by non-government institutions.
But through various mechanisms, GSTN is under strategic control of the government.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
