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The article will discuss what GST network is all about, what are the issues and apprehensions surrounding it, the relevance of these apprehensions and the way forward.
GST Network:
The main issue associated with the GSTN revolves around the ‘Ownership Structure of the GSTN’ wherein Government of India has an equity of 24.5% while the states (including NCT Delhi and Puducherry) have another 24.5% equity. The major 51% stakes belong to the Non Government Financial Institutions (like ICICI, HDFC, HSBC etc).
Presently the Govt is not planning to change the ownership structure of the GSTN, which provides the information technology backbone of the new indirect tax regime. The structure seems to be well thought of wherein some of the finest private companies owning a part stake in GSTN would help in creating a more professional and service oriented entity. Millions of invoices will have to matched each day on the tax network, which makes it imperative that the GSTN be run by competent people from the IT and other sectors as the government may not be able to provide relevant human resources.
However, there are certain apprehensions pertaining to which it is believed that the ownership structure may need certain amendments. For example, the GSTN would handle sensitive tax data due to which it may best dealt by Govt Company in National Economic Interests. The scrutiny by the Rajya Sabha Select Committee throws light on the undesirability of the presence of private companies, with significant foreign holdings. The GSTN is the comprehensive back end infrastructure network for the management of tax data and reporting of the GST. The Select Committee recommended that the non government institution shareholding be limited to public sector banks and financial institutions. It also stated that the information technology preparedness of states must be improved. Further, the IT infrastructure, unified tax credit clearing mechanism may be put in place. However at present, when Public Sector Banks are stressed with rising NPAs and are undergoing substantial structural reforms, the option of resting Non Governmental Stakes with them may not be Feasible.
Secondly, In midst of various cyber security issues, it is more desirable that govt raises its stakes as well as responsibility so as to keep sensitive tax data secure and keep the Non Government institutions involved more accountable to the public. The incapacity of the government to provide the necessary IT Human Resource must not be used as an excuse in this regard but rather as an opportunity to raise IT task Force. Such a step can go a long way in retention of Government Control in sensitive Data of Public Interest and also plug in the gaps of Cyber Security. However with less than one year left for GST rollout, generating a strong IT task force in that time may not be possible. Hence the present ownership structure needs to be maintained with a simultaneous efforts of the Government to generate more Human Resource in IT.
The Way Forward:
As a way forward, it must be pointed out that the structure of Government in India has undergone significant changes since Post Liberalisation phase. Today this structure is more associated with minimum government and maximum governance, which mandates private participation along with Government regulation.
Hence the idea behind the ownership structure of the GST Network must be to create an entity that is under the strategic control of the government but will have the flexibility of the private sector.
By: Chandan Sharma ProfileResourcesReport error
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