The network, backbone of GST operations, is at risk of data breach if in private control, feels govt
The government will take over the control of GSTN, the backbone of GST operations, from private players. The GST Council, the highest body on the Goods and Services Tax, gave its approval to convert GSTN to a fully government-controlled company, aimed at thwarting any potential data breach.
Finance Minister Arun Jaitley, who chaired the meeting, said: "I had made a suggestion that this shareholding of 51 percent should be taken over by the govt and divided equally between the states and Centre."
The decision comes nearly 10 days after this newspaper revealed that lobbyists had forced the UPA government to privatise the Goods and Services Tax Network (GSTN). The influencers had stalled efforts of the earlier regime to discuss risks of entrusting a privately controlled organisation with handling the crucial database.
GSTN handles invoice data of lakhs of business entities, including exports and imports. Considering the nature of 'state' function performed by GSTN, the Council felt that it should be converted into a 'fully owned government company'.
Sheila Sangwan, a former member of the Central Board of Excise and Customs (CBEC), was the first to raise a red flag, in 2011, on the potential data security threat under a privately controlled GSTN. Sangwan told DNA, "In national interest I am glad to see enlightenment has come. Would expect some accountability also so that those who refused to see sense in 2011 also stand exposed and are held at least accountable. This may then serve as a lesson for decision-makers to act correctly in the national interest in the future".
Sangwan was representative of CBEC in the Empowered Group on GST led by Nandan Nilekani, co-founder of Infosys.
SD Mazumdar, a former chairman of CBEC who too had backed Sangwan's concerns, said, "Better late than never. Some of us, then working in the CBEC, had strongly felt that data is power and that should remain in total control of the sovereign i.e. the government. In this age of tough competition in the Trade and Industry, even they said that they would feel more safe and secure with data under the custody and control of the Government. The other thing about the HR issues, the Council has said that this concern would be taken care of by certain provisions for attracting the talent".
Pratik Jain, partner & leader, indirect tax – PwC India, said any change in ownership of GSTN should not impact its functioning, particularly because the "existing terms of current staff is protected for five years and flexibility of operations is intended to continue, at least for now".
Currently, the government holds 49 percent stake in GSTN — the Centre and states share 24.5 percent each — and the majority 51 percent is held by five non-government institutions — 11 percent by LIC Housing Finance and 10 percent each by HDFC, HDFC Bank, ICICI Bank and NSE Strategic Investment Co Ltd.
WHO OWNS GSTN
The govt holds 49% stake in GSTN, while 51% is held by five non-government bodies – LIC Housing Finance, HDFC, HDFC Bank, ICICI Bank and NSE Strategic Investment Co
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