GSTN is currently helping around 10 states to prepare for the transition, Navin Kumar, chairman of GSTNA strong technology backbone is considered crucial for the successful rollout of GST, a tax reform that seeks to economically unify the country by subsuming a slew of indirect taxes levied by the central and state governments.
New Delhi: Goods and Services Tax Network (GSTN), the company tasked with building the information technology infrastructure to implement the nation’s biggest indirect tax reform, is hand-holding several states, including Uttar Pradesh, Odisha and Bihar, to ensure that they are prepared to meet the 1 April deadline for implementing the new tax regime.
With technology capabilities varying across states, GSTN is currently helping around 10 states to prepare for the transition, Navin Kumar, chairman of GSTN, said in an interview last week.
“All states have fully computerized VAT (value-added tax) but the degree of sophistication varies. States like Maharashtra and Karnataka have very sophisticated systems. On the other hand, smaller states like the north-eastern states, systems are very rudimentary. For states to use our common portal, there has to be a certain level of IT (information technology) enablement. For that, all states will have to revamp their systems,” he said.
“Assessment has been made of the IT capacity of states. We felt that not all states will be ready by 1 April. So we have offered states our help to do their back end,” he said.
Around 12 states and Union territories have accepted this offer, including Uttar Pradesh, Bihar, Odisha, six north-eastern states, Uttarakhand, Himachal Pradesh and Puducherry.
“There are 10 states that are working quite seriously on setting up the systems on their own, like Punjab, Haryana, and Tamil Nadu. We have even offered our help to the remaining states,” he added.
GSTN will connect the databases of the states and the centre. The system it puts in place will be used to implement Permanent Account Number (PAN)-based registration, filing of tax returns and a payment processing system. It is expected to check tax evasion and help broaden the tax base.
A strong technology backbone is considered crucial for the successful rollout of GST, a tax reform that seeks to economically unify the country by subsuming a slew of indirect taxes levied by the central and state governments.
“Our common portal will be the front end where all taxpayers will come. But this data, we will pass onto the respective tax authorities. Therefore, they have to have systems that will accept this data and process it,” Kumar said.
In the first stage, GSTN will finalize a uniform registration, return, refund and payment system to be followed across India. It will be compulsory for dealers with a turnover of more than Rs.10 lakh to register with GSTN.
Dealer registration will be automatically done within three days and there will be no pre-verification by the state government.
In the next stage, GSTN will develop systems for assessment and audits. Kumar said he was confident that the IT backbone will be in place before 1 April.
GSTN has floated a request for proposal to outsource the development of the common portal to IT firms. It hopes to have the portal in place by January.
Bipin Sapra, tax partner at EY, said GSTN is trying to pull up laggard states and integrate them into the system.
“It is going to be difficult if laggard states do not manage to develop the necessary systems on time. The success of GST is dependent on the success of the IT network and for this all states have to be prepared by 1 April,” he said.