The Union Cabinet on Wednesday approved a proposal to convert the GST Network, the technology backbone of GST, into a government company.

The Centre will now turn a majority stakeholder in the company by acquiring 50% stake in GSTN with the remaining going to states on pro-rata basis.

At present, the Centre and states together hold 49% in GSTN and remaining 51% is under control of five financial institution – LIC Housing Finance Ltd, HDFC Ltd, HDFC Bank Ltd, ICICI Bank Ltd and NSE Strategic Investment Co.

The GST Council had earlier approved a proposal to convert GSTN into 100% government-owned company.

The GSTN was incorporated as a private limited company in 2013 under the UPA government.

Senior BJP leader Subramanian Swamy, who had demanded a change in shareholding pattern in the GSTN as he believed private majority in GSTN was a grave security issue, said it was his victory.