As India readies for a countrywide Goods and Services Tax (GST), a team of technology specialists and tax experts are busy stitching together a robust country-wide information technology (IT) network and to make the rollout seamless.
GST Network (GSTN), a special purpose vehicle (SPV), was set up as a private limited company in 2013 to create a robust IT backbone to enable real-time taxpayer registration, filing returns, handle invoices, execute inter-state tax settlements, and connect states for two-way data flow.
“The system which is being prepared by Infosys is 60% through and will be ready to be rolled out by December-end,” GSTN chairman Navin Kumar told HT.
“As far as the hardware required to put the software in action, the government will be in a position to release those funds once the Constitution Amendment Bill is passed by the Parliament,” Kumar said.
The tech backbone will be a portal-driven system that will connect the databases of the states and the centre and will help check tax evasion and help broaden the tax base. The portal is likely to be named “gstindia,” sources said.
The tech network will tested through a string of simulated dry runs before the new tax system’s expected roll-out from April 1, 2017.
This exercise will take place and glitches ironed ahead of implementation once the GST rates on specific goods and services are decided.
The rates will likely be specified in the sub-ordinate legislations that will have to be passed after the main central law is enacted. These include the state GST law, the central GST law and the inter-state GST law. These are enabling legislations that are necessary for rolling the new tax system.
GST will replaced a string of central and local levies such as excise duty, value added tax and octroi into a single unified tax and stitch together a common national market.
The hardware network of storage servers and computers for GSTN will involve an estimated cost of about Rs 500 crore.
IT services major Infosys has prepared a software to enable the traders, manufacturers, service providers to register with the government with a GST identity code. The government had awarded a contract worth Rs.1,380 crore to Infosys Ltd to build and maintain the technology network.
“GSTN is assisting 17 states and 5 union teritories to absorb the system and the workings to deal with the tax returns, tax structure, payments etc by giving them training and support. In the second stage, it will develop systems for assessing and auditing tax returns and filings,” Kumar said.
For the ease of the taxpayer and the tax administrators the finance ministry is also likely to set up two sets of 24-hour help lines.
Also, for the tax payers who are technologically challenged, government is likely to have tax return preparers and agents who can be approached for outsourcing of these services for a nominal fee.
The IT backbone, Kumar said, is designed in a manner that is easy to understand and will ensure a seamless transfer of funds with transparency.