Goods and Services Tax Network has initiated the process of transferring the 51% stake currently held by non-government institutions to the Union and state governments, the Lok Sabha was informed on Monday. GSTN has amended its memorandum of association and articles of association to facilitate ownership transfer, minister of state for finance and corporate affairs Anurag Thakur informed the house in a written reply to a question. The GST Council and the ministry of corporate affairs have approved the amendments.
The GST Council had directed last year that GSTN be converted into a 100% government-owned entity. In September 2018, the Union cabinet cleared the decision to convert GSTN into a wholly owned government company with 50% equity held by the Union government and the other 50% by states and Union territories.
GSTN is a nonprofit organisation set up for the creation of a network to administer the GST accessible to stakeholders, government and taxpayers. It was set up with an authorised capital of Rs 10 crore in which the Union government held 24.5%, state governments 24.5%, and the remaining 51% by private financial institutions.
The Goods and Services Tax is a comprehensive destination-based tax. It came into effect on July 1, 2017, replacing multiple taxes levied by the Union and state governments. The tax rates and rules are governed by GST Council, comprising the finance ministers of central and state governments.