Finance Ministry did not ask for security clearance for GSTN says MHA

Amid concerns raised by senior tax officials and indirect tax organisation employees’ organisations, the Minister of State for Home has said that there was no security clearance sought by the Finance Ministry for setting up the GSTN. He submitted this reply in writing to the Lok Sabha.

The GSTN (Goods and Services Tax Network) was set up in 2013 as a not-for-profit private limited company. Its main purpose is to provide IT infrastructure and other technical help required by State and Central governments to transition to the new GST model. Five private institutions have 51 percent equity in the GSTN, namely HDFC Bank Ltd, HDFC Ltd, and ICICI Bank Ltd and NSE Strategic Investment Corporation Ltd (10 per cent each), and LIC Housing Finance Limited (11 per cent). The Central Govt. holds 24.5% share, while the rest is divided between the states, union territories, and the council of state finance ministers.

What this means for the GST deadline?

So, we now know that the Finance Ministry has bypassed the guidelines set up by the Ministry of Home Affairs in 2015. These guidelines lay down fifteen parameters in sensitive areas like defence, telecom, power, aviation, and FIPB (Foreign Investment Promotion Board) which define the need security clearances for companies. Not only this, the ministry has also not taken inputs from agencies like the IB, CBI, ED on minor crimes.

With the MHA asking for clarification on this, some are expecting a delay in the rollout of the GST plan. If it is found that the GSTN falls under the sector and category in which a security clearance from the MHA is necessary, then the GST rollout date may be pushed forward from its current July 1 deadline.

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