GSTN to Borrow Rs.800 crs for Infrastructure Cost

· Authority to Charge Users for Cost Recovery, Tax Compliance Charge to be Borne by Tax Payer

· Centre and State Government as Beneficiaries of GST Not Prepared to Pay for Collection Cost?

· Gains will come to them from Profits with Rs. 10 crs Paltry Shareholding

GSTN will borrow Rs.800 crore from banks to fund infrastructure costs to support Goods and Services Tax rollout from April 1 next year.

The Goods and Services Tax Network (GSTN), a not-for-profit, non-government, private limited company promoted by the Central and State governments, is borrowing Rs.250 crore for working capital needs and another Rs.550 crore as long-term loan from domestic lenders, its chairman Navin Kumar told PTI.

The Centre has 24.5 per cent stake in GSTN and the state governments an equal share. The remaining 51 per cent is with private financial institutions.

Kumar said the cost of infrastructure to support the GST will be Rs.1,380 crore out of which Rs. 550 crs will be from loans.

The central government’s sanctioned grant is only Rs.315 crore for the first three years.

“The government has released Rs.120 crore from the grant, and we have used Rs.64 crore, rest of the money we have to refund to the government,” Navin Kumar said, adding this year the entire expenses would be met through borrowing.

Kumar said after receiving Letter of Guarantee from the government, the GSTN will raise a five-year term loan of Rs.550 crore from various Indian banks.

“We have also requested for a Rs.250-crore working capital loan. So, if there is any delay by any government in making payment, then we will borrow money. We have selected the banks,” he said.