GSTN to borrow Rs 800 crore to meet GST infra building cost
Goods and Services Tax Network (GSTN), the company that is building the world's biggest and most complex tax system, will borrow Rs 800 crore from banks to fund infrastructure costs to support Goods and Services Tax roll out from April 1 next year.
The 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 here.
The government of India has 24.5 % stake in GSTN and the state government an equal share. The remaining 51 % is with private financial institutions.
"The total authorised and paid-up capital is Rs 10 crore. So, Rs 4.90 crore has come from central and state governments and Rs 5.10 crore from private institutions," he said.
Kumar said the cost of infrastructure to support the GST will be Rs 1,380 crore.
"We will be borrowing Rs 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 Rs 64 crore towards payments to its vendors and employees out of the central government's sanctioned grant of Rs 315 crore for the first three years.
"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," he said, adding this year 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.
Explaining how the working capital and term loan would work, he said 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).
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
04:03 PM IST