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THE UNION Ministry of Home Affairs has written to the Finance Ministry to ascertain whether Goods and Services Tax Network (GSTN), a private limited company, is among the sector and category where a security clearance is mandatory from the MHA.
Set up in 2012, GSTN is the privately held special purpose vehicle (SPV) meant to provide IT infrastructure and services to the Central and state governments for implementation of the Goods and Services Tax (GST). The MHA’s move comes even as Minister of State for Home Hansraj G Ahir informed Lok Sabha in a written reply on Tuesday that “no security clearance was obtained by the Ministry of Finance from MHA at the time of incorporation of GSTN-SPV”.
Under the guidelines, the parent ministry needs to examine whether security clearance is required by private entities, or its foreign directors in that sector.
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“We have asked the Finance Ministry to examine the reference to find out whether a security clearance is required in the wake of revised guidelines of MHA,” an MHA official confirmed.
On January 12, The Indian Express had reported on queries raised over GSTN.
The MHA had come out with these guidelines for security clearances in May 2015. As part of this, 15 parameters were set out in sensitive areas such as defence, telecom, ports, power, civil aviation, up-linking/down linking of TV channels or FM stations, and FIPB (Foreign Investment Promotion Board) proposals.
The revised policy spelt out by MHA “aims to ensure an objective balance between the requirements of national security and the imperatives of rapid economic growth,” the official explained.
The ministry has also decided to do away with the requirement for inputs from the IB, CBI, ED and other agencies for minor crimes. The move may cause a delay in the GST’s rollout.
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GSTN was set up as a not-for-profit private limited company in 2012 and has 51 per cent equity of five private institutions: HDFC Bank Ltd, HDFC Ltd, and ICICI Bank Ltd and NSE Strategic Investment Corporation Ltd (10 per cent each), and LIC Housing Finance Limited (11 per cent). “The Central government has 24.5 per cent equity in GSTN, whereas state governments, two Union Territories and empowered committee of state finance ministers together hold another 24.5 per cent stake,” Ahir told the House.
The inquiry into GSTN was launched following BJP MP Subramanian Swamy’s letter to Prime Minister Narendra Modi, questioning the Rs 300-crore grant by the Finance Ministry to privately held SPV. He argued that the Central Board of Excise and Customs can perform the same work for much less.