Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8), non-Government, private limited company. It was incorporated on March 28, 2013. The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-Government financial institutions. The Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST).
The Authorised Capital of the company is Rs. 10,00,00,000 (Rupees ten crore only).
Constitution and Shareholding Pattern of the Company
GSTN SPV was incorporated on March 28, 2013 as a Non-Government, not for Profit (Section 25), private limited company registered under the Companies Act, 1956. The Authorised Share Capital of the company is INR 10,00,00,000 (Rupees ten Crore only) with 49% equity of the company held by the Government (24.5% Central Government and 24.5% all State Governments/UTs put together) and 51% equity is held by private financial institutions namely ICICI Bank, HDFC Bank, HDFC Ltd, LIC Housing Finance and National Stock Exchange Strategic Investment Corporation Ltd.
The strategic control over GSTN is with the Government given the sensitivity of the role of GSTN and the information that would be available with it. The strategic control of the Government over GSTN is ensured through measures such as composition of the Board, mechanism of Special Resolution and Shareholders Agreement, induction of Government officers on the deputation and agreements between GSTN and Governments.
Funding Pattern and Revenue Model
GSTN has been initially funded through a one-time non-recurring Grant in-aid of Rs. 315 crores from the Central Government towards expenditure for the initial setting up and functioning of the SPV for a three year period after incorporation. After rolling out of GST, the Revenue Model of GSTN shall consist of User Charge to be paid by stakeholders who will use the system and thus it will be a self-sustaining organization.
Board of Directors
The Board of Directors of GSTN SPV comprises of 14 directors with 3 Directors from the Centre, 3 from the States, a Chairman of the Board of Directors appointed through a joint approval mechanism of Centre and States, 3 Directors from the private equity stakeholders, 3 independent Directors who are persons of eminence and the CEO of GSTN selected through an open selection process.
GSTN initially started its operations from The Janpath Hotel with a small team of 4-5 employees. However, after recruitment of employees both from the open market as well as deputationists, the size of the team and operations have grown substantially and, therefore, the company shifted its office to a modern, more equipped and spacious premises at Aerocity, New Delhi in December 2015. The registered office of GSTN has since been changed to 4th Floor, East Wing, Worldmark-1, Aerocity, New Delhi-110037.
Today GSTN has a team of 46 full time employees including 37 from the Private Sector and 9 deputationists from the Government. The Organisation Structure of the Company broadly consists of 3 verticals, viz. Technology, Services and Support each headed by an Executive Vice President (EVP) reporting to the CEO. The Technology team is to be entirely sourced from the Private Sector, Services Team from deputationists consisting of Tax Officials from the Central and State Governments and the Support team is a mix from both Private Sector as well deputationists.
List of Shareholders as on 31st January, 2016
State Governments & 2 UTs & EC Collectively
LIC Housing Finance Ltd
ICICI Bank Ltd
HDFC Bank Ltd
NSE Strategic Investment Corporation Ltd
Mandate of GSTN
The GSTN has been mandated to provide the following additional services to the various stakeholders:
- Provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders.
- Partner with other agencies for creating an efficient and user-friendly GST Eco-system.
- Encourage and collaborate with GST Suvidha Providers (GSPs) to roll out GST Applications for providing simplified services to the stakeholders.
- Carry out research, study best practises and provide Training and Consultancy to the Tax authorities and other stakeholders.
- Provide efficient Backend Services to the Tax Departments of the Central and State Governments on request.
- Develop Tax Payer Profiling Utility (TPU) for Central and State Tax Administration.
- Assist Tax authorities in improving Tax compliance and transparency of Tax Administration system.
- Deliver any other services of relevance to the Central and State Governments and other stakeholders on request.
- India’s second largest IT services Company Infosys through a rigorous competitive bidding process, in which other big IT companies like TCS, Wipro, Tech Mahindra and Microsoft also participated, bagged the contract of Rs 1,380 crore to be the Managed Service Provider (MSP) for GSTN. The MSP shall build the technology infrastructure for Goods and Services Tax known as the GST System Project (GSTSP), a common Portal for the use of different Tax Payers, Tax Administrators and other stakeholders which includes common Registration, Return and Payment services. The MSP will build the system and once it is ready they will operate it for five years. The Contract with Infosys was signed on 6th November 2015.
- The Business Requirement Documents (BRD) for the various modules of the proposed GSTSP and the System Requirement Specifications (SRS) are in the process of finalisation. The Development Teams of MSP will now embark upon development of the System at its Bangalore Development Centre. The training programs for the benefit of various stakeholders will also be launched shortly.