Economy

GSTN to borrow ₹800 cr to meet infra building cost

Press Trust of India New Delhi | Updated on January 16, 2018 Published on October 31, 2016

GSTN, the company that is building the world’s biggest and most complex tax system, will borrow ₹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 ₹250 crore for working capital needs and another ₹550 crore as long-term loan from domestic lenders, its chairman Navin Kumar told PTI here.

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.

“The total authorised and paid-up capital is ₹10 crore. So, ₹4.90 crore has come from Central and State governments and ₹5.10 crore from private institutions,” he said.

Kumar said the cost of infrastructure to support the GST will be ₹1,380 crore.

“We will be borrowing ₹550 crore for infrastructure. We have also sought some working capital limit, that we will see if there is any default in payment,” he said.

Since its incorporation on March 28, 2013, the GSTN had used ₹64 crore towards payments to its vendors and employees out of the central government’s sanctioned grant of ₹315 crore for the first three years.

“The government has released ₹120 crore from the grant, and we have used ₹64 crore, rest of the money we have to refund to the government,” he 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 ₹550 crore from various Indian banks.

“We have also requested for a ₹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.

Explaining how the working capital and term loans would work, he said the working capital loan works like a credit and at the end of the year the borrower has to square up the loans.

But the payment of term loan has to be made every month.

GSTN is a non-government, private limited company promoted by the central and state governments with the specific mandate to build the IT infrastructure and the services required for implementing Goods and Services Tax (GST).



Published on October 31, 2016
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