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Issues galore for GSTN conversion to govt entity owing to technical glitches

GSTN Council headed by Finance Minister had approved the move in a meeting in May

Published: 23rd June 2018 11:12 PM  |   Last Updated: 24th June 2018 01:25 PM   |  A+A-

Image used for representational purpose

Express News Service

NEW DELHI:  The process of converting Goods and Services Tax Network (GSTN), the IT backbone of the unified indirect tax system, into a 100 per cent government-owned entity may not happen anytime soon and may not happen this fiscal, thanks to “technical issues”.The GSTN was created as a private limited, not-for-profit company under Section 25 of the Companies Act, 1956, on March 28, 2013, to provide shared IT infrastructure and services to the Central and state governments for implementation of the GST. 
Currently, the Central and state governments hold 24.5 per cent stake each in GSTN; the rest 51 per cent is held by non-governmental institutions like HDFC Ltd, HDFC Bank Ltd, ICICI Bank Ltd, NSE Strategic Investment Co and LIC Housing Finance Ltd. 

In its 27th meeting in May, the GST Council headed by Union Finance Minister Arun Jaitley approved a proposal for its conversion into a government entity. “There are many procedural formalities that have to be completed, which includes issuing fresh term of the contract for the employees, looking for a new chairman and some structural changes. These are not major issues, but the process on this is painfully slow. It is only after these technicalities are settled that the formal process for conversion will be placed before the Union Cabinet. Going by the current progress, I do not see it happening this fiscal,” a senior Finance Ministry official said.

Currently, UIDAI chief Ajay Bhushan Pandey is the interim chairman of GSTN. According to sources, Vanaja N Sarna, Chairman, Central Board of Indirect Taxes and Customs, who is retiring next week, may be considered for the post. The terms and contract for the existing staff are also taking time, sources said. 
“There is a lot of disagreement over the employment contract and salary structure of the staff.

While the government has allowed the GSTN Board to retain the existing staff on the same terms for five years, the Board is seeking service terms on par with the PSUs and salaries on par with the private sector to attract talent. That issue is not settled yet and deliberations are still going on,” another official from GSTN told The Sunday Standard.

What’s holding it back
Disagreements over employment contract and salary structure of staff
Search for a new chairman
Other structural changes



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