The Goods & Services Tax, which the government has said will come into effect on July 1, is almost a reality. A lesser known aspect of the new tax, which the government hopes will turn India into a common market, is that its IT administration will be carried out by the GST Network. GSTN is a private company with 48% of its ownership held by the central government and 51% by a collection of entities like HDFC bank, ICICI bank and LIC. The government auditor has flagged concerns about a private entity, which is not open to auditing, being the backbone of the government’s taxation approach.

On Wednesday in the Rajya Sabha, Bharatiya Janata Party Member of Parliament Submranian Swamy brought up the question of the GSTN during discussion over the GST bills.

Mr. Deputy Chairman, Sir, I wish to bring to the notice of this House a grave national security issue which should receive precedence well before we consider the GST Bill. There is a body, a private limited company, which was created in 2013 called GSTN, which is the cyber brain of GST, that is, all data processing is to be done by that. There was a Select Committee of this House, headed by Shri Bhupender Yadav, who is amongst us here. That Committee, unanimously, recommended the following. Unfortunately, the recommendation has been completely ignored and has not been in any part of any debate either in the Lok Sabha or here... 

(interruptions) 

Wait a minute! You do not have to defend it. The Committee feels GSTN shall play a crucial role in implementation of GST as it shall provide the IT infrastructure for implementation of GST. It has noted that non-Governmental shareholding of GSTN is dominated by private banks. This is not desirable because of two reasons. 

First, public sector banks have more than 70 per cent of the total credit lending in the country. Secondly, GSTN work is of strategic importance to the country — this is the point I want to emphasize — and the firm would be a repository of a lot of sensitive data on business entities across the country. In light of the above, the Committee strongly recommends — and that is unanimously—that Government may take immediate steps to ensure non-Governmental financial institutions shareholding be limited to public sector banks or public sector financial institutions. 

Now, one point here, the GSTN has been so designed that it cannot be audited by the CAG. Today’s newspapers, particularly, the Hindu, says that the CAG is up in arms on that. All the money is public money. It has not yet been sent to the Home Ministry for security clearance. It cannot be questioned under RTI. I mean, this is a kind of a shady organisation that has come into being. ...(Interruptions)... Therefore, I would say this House should first discuss GSTN, whether they are going to restructure it according to the Bhupender Yadav Committee or not.