There was no security clearance obtained by Finance Ministry from the Ministry of Home Affairs at the time of incorporation of Goods and Services Tax Network (GSTN), a special purpose vehicle set up to provide Information Technology infrastructure for implementation of the GST, Union Minister Kiren Rijiju said today.
The GSTN was set up as a not-for-profit private limited company in 2013 which has 51 per cent equity of five private institutions--HDFC Bank Ltd (10 per cent), HDFC Ltd (10 per cent), ICICI Bank Ltd (10 per cent), NSE Strategic Investment Corporation Ltd (10 per cent) and LIC Housing Finance Limited (11 per cent).
Central government has 24.5 per cent equity in GSTN, whereas state governments, two union territories and empowered committee of state finance ministers together hold another 24.5 per cent stake in it.
"No security clearance was obtained by the Ministry of Finance from the Ministry of Home Affairs at the time of incorporation of GSTN-Special Purpose Vehicle," the Minister of State for Home said in a written reply to Lok Sabha.
Some senior officials and indirect tax employees organisation have raised objections over the management pattern of GSTN with majority stake in private hands.
They had said since GSTN is funded by the central and state governments, there is no justification in entrusting its management to private individuals with heavy salary and allowance.
BJP MP Subramanian Swamy has also been opposing majority stake for private entities in GSTN and has already written to Prime Minister Narendra Modi objecting to this.
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