Funding of GSTN

About Us

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). From About us to relationship with tax payers

Funding of GSTN

  • As mentioned above, the Central Government while approving creation of GSTN also approved a non-recurring grant of Rs 315 Crores. The table below shows the funds released by the Central Government since inception of GSTN and the funds actually utilised by the Company:
Year Funds released by GoI Actual Expenditure by GSTN
2013-14 3,03,65,612 3,03,65,612
2014-15 20,00,00,000 13,80,31,415
2015-16 120,93,00,00013 45,27,97,027
Total 143,96,65,612 62,11,94,054
  • The Empowered Committee of State Finance Ministers has, in its meeting held on 30th Aug 2016, approved the Revenue Model of GSTN which is based on taking commercial loan from a commercial bank for its pre-operative fund requirement of Rs 550 crores in FY 2016-17, which includes payments to M/S Infosys, the Managed Service Provider developing the software and providing required hardware and software licenses. The Central Government has agreed to provide required guarantee for the same. Post GST rollout, GSTN will be charging user fees. The GST System infrastructure managed by GSTN will be used by tax-payers, tax administrations, banks, etc. but the user charges will be paid entirely by the Central Government and the State Governments in equal proportion i.e. 50:50 on behalf of all users. The State share will be apportioned to individual States in proportion to the number of taxpayers in the State.

  • The accounts of GSTN are approved by the Board and shared with all shareholders apart from being tabled in the Parliament.

Internal Financial Control and Procurement

GSTN has developed its own Finance and Accounts Manual to define the roles and responsibilities of the functionaries working in GSTN, establish sound internal controls and define the accounting policies and procedures to be followed by GSTN. The Manual complies with Accounting Standards issued by The Institute of Chartered Accountants of India and the Companies Act 2013 and is largely based on GFR 2005.

Expenses of GSTN

The major chunk of expenses to be incurred by GSTN consists of payment to Managed Service Provider M/S Infosys for design and development of GST Systems, supply of all underlying infrastructure, software licenses, bandwidth and operation and maintenance of GST systems for five years from the go-live date. M/S Infosys was selected by open tendering process. The second chunk will be on ‘Fraud Analytics Tools’ and team to run the same during project operation period along with cost of security audit and other program governance functions. The agency to do this function will be selected through open tendering process. The third component is operating expenses of GSTN which consists of salary, rent of office building, office expenses, internal IT facilities, etc.

CAG’s Audit

Being substantially funded by the government during 2013-16 period, the C&AG has conducted the expenditure audit of GSTN for FY 2013-14, 2014-15 and 2015-16.

Annual Report

The annual report of GSTN for FY 2013-14 1nd 2014-15 has been laid on the table of the Parliament and circulated to all shareholders.