The GST Network has already initiated the process to transfer 51 per cent of equity held by the non-government institutions to the Centre and states equally, Union Minister of State for Finance & Corporate Affairs Anurag Thakur said in a written reply to a question in Lok Sabha. The necessary amendments in the GSTN's Memorandum of Association (MOA) and Articles of Association (AOA) have been made and the same have also been approved by the GST Council, he added.
GST Network (GSTN) was incorporated as a private limited company on March 28, 2013 under the UPA-II government. Currently, the Centre and states hold 49 per cent stake in the IT backbone for the indirect tax regime. With the share transfer, government will acquire the remaining 51 per cent stake in the company, taking its shareholding to 100 per cent. Following this, 50 per cent of the equity in GSTN will be held by the Centre and the rest 50 per cent will be held by various states and union territories on pro rata basis.
The GST Council in its 27th meeting held on May 4, 2018 had resolved that GSTN will be converted into a fully government-owned entity by transferring 51 per cent equity shares held by the non-government institutions to the Centre and states equally. On September 26, 2018, the Union Cabinet had also approved the transfer of GSTN shares to government.
Back in September 2018, the Cabinet had also agreed to change the existing composition of the GSTN board. The government intends to induct three directors from the Centre and the states. Three independent directors will be nominated by the Board of Directors and one Chairman and the CEO. The total number of directors on the GSTN board will be 11.
Moreover, Ministry of Corporate Affairs had approved the modified MOA and AOA to this end on March 22, 2019 in accordance to the provisions of Companies Act, 2013. The shareholders of GSTN had also given the green signal to transfer of shares from non-government institutions to Centre and states as well as the modified MOA and AOA.