ICICI Bank has exited the company following the government of India's decision to make GST Network into a public sector entity last year.
Private sector ICICI Bank on Friday said it has exited the GST Network, the company facilitating collection of the indirect tax, by selling its entire 10 per cent stake to as many as 13 state governments. The stake sale is for aggregate cash consideration of Rs 1 crore, ICICI Bank said in a regulatory filing.
The stake transfer to various stake governments will be completed by the end of March 2020, it said. The bank will transfer 0.14 per cent stake to the Assam government and 0.81 per cent stake to the Telangana government. Besides, it will transfer Goa, Kerala, Manipur, Tripura, West Bengal, Delhi, Jharkhand, Uttar Pradesh, Chhattisgarh, Madhya Pradesh and Arunachal Pradesh governments 0.82 per cent stake each.
ICICI Bank has exited the company following the government of India’s decision to make GST Network into a public sector entity last year. As per the decision, the Centre will own a 50 per cent stake in the GST Network and the remainder will be held by the states on a pro-rata basis in the new structure.
Currently, the Centre and the states together hold a 49 per cent stake in the company, which provides the IT backbone to the indirect tax regime. The remaining 51 per cent is held by five private financial institutions – HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance.
GSTN was incorporated as a private limited company on March 28, 2013, under the previous UPA government. It is a not-for-profit entity. There had been criticism about allowing private companies to hold a majority stake in GSTN and demands to change its structure. However, it was then felt that private sector participation in the company would provide it with flexibility in hiring and operational freedom. GST, which replaced multiple state and central taxes with a single levy, was rolled out across the nation on July 1 last year.
GSTN faced widespread criticism after the portal crashed several times and businesses found it difficult to file returns. With the portal stabilising, the government said the time was right to change the ownership.