Final Push

GST infrastructure is a work in Progress. The government will have to burn the midnight oil if it wants to meet the April 2017 deadline.

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Dipak Mondal
  • Jul 9, 2016,
  • Updated Jul 17, 2016 1:16 PM IST

Navin Kumar, Chairman of GST Network, a not-for-profit company set up to provide IT infrastructure and services for the proposed Goods and Services Tax, or GST, looks calm and composed. The calmness hides the difficult nature of the task he has on his hands.

Kumar and his team, working from the fourth floor of an office complex in Delhi's Aerocity, are racing against time to build the IT platform on which businesses will register themselves, pay taxes and file returns after the GST comes into force. His team as well as the IT vendor, Infosys, are, in a way, shooting in the dark - they are writing the software without knowing the final shape the GST law and rules will take. All they have to work with is a model law released on June 14 this year, which, too, will go through changes after suggestions from stakeholders.

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"The release of the model GST law has meant more work for us. If the law had been finalised before the work was commissioned, it would have been easier for us. Since the two things are running parallel, it becomes a little difficult to incorporate the changes (in the software) as and when they are made," say Kumar.

The implementation of GST, India's most ambitious effort to simplify the indirect tax system, has been a work in progress for close to a decade. The law, supposed to be implemented from April 1, 2010, but delayed due to fighting between India's two biggest political parties, got a new lease of life recently when the empowered committee of state finance ministers gave it an approval in principle. Now, with recent elections changing the numbers in the Rajya Sabha in favour of the ruling National Democratic Alliance, there is a chance that the GST Bill may be passed in the monsoon session of Parliament.

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However, the next question - the first being the passage of the Bill itself - is the government's ability to implement the law from the targeted date of April 1, 2017. With just nine months to go, no rules in place yet, writing of the software a work in progress, and no movement on purchase of hardware, it will require the Centre and states to do some heavy lifting if they are to meet the ambitious deadline.

A Maharashtra commercial tax officer, for instance, says it will take not less than six months to get the system in place after the rules are finalised. "If the rules are not finalised by September, it will be difficult to get the system ready by April next year," he says. This, when Maharashtra has a robust and automated commercial tax system. Some states do not even have a fully-computerised tax system.

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While the common IT platform, the interface and the back-end are the core of the GST system, training of tax officials from the Centre and states is equally important for seamless transition from the current value-added tax, or VAT system, to the new regime.

"Though VAT and GST are not very different, the processes are different. So, you have to train the officers," says Kumar of GSTN.

The work for training officials has started. The department of revenue has started a programme for training state and CBEC officers in the legal aspects of the GST law. For new technology, GSTN has drawn up a training programme and hopes to start from August. There are around 100,000 tax officers in states and at the Centre. GSTN alone can't train them all. So, it plans to teach some master trainers. These trainers - 300 in total - will then train 1,500 officers of states and the CBEC. For taxpayers, GSTN will work with trade associations.

For now, it's over to the Rajya Sabha.

Navin Kumar, Chairman of GST Network, a not-for-profit company set up to provide IT infrastructure and services for the proposed Goods and Services Tax, or GST, looks calm and composed. The calmness hides the difficult nature of the task he has on his hands.

Kumar and his team, working from the fourth floor of an office complex in Delhi's Aerocity, are racing against time to build the IT platform on which businesses will register themselves, pay taxes and file returns after the GST comes into force. His team as well as the IT vendor, Infosys, are, in a way, shooting in the dark - they are writing the software without knowing the final shape the GST law and rules will take. All they have to work with is a model law released on June 14 this year, which, too, will go through changes after suggestions from stakeholders.

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"The release of the model GST law has meant more work for us. If the law had been finalised before the work was commissioned, it would have been easier for us. Since the two things are running parallel, it becomes a little difficult to incorporate the changes (in the software) as and when they are made," say Kumar.

The implementation of GST, India's most ambitious effort to simplify the indirect tax system, has been a work in progress for close to a decade. The law, supposed to be implemented from April 1, 2010, but delayed due to fighting between India's two biggest political parties, got a new lease of life recently when the empowered committee of state finance ministers gave it an approval in principle. Now, with recent elections changing the numbers in the Rajya Sabha in favour of the ruling National Democratic Alliance, there is a chance that the GST Bill may be passed in the monsoon session of Parliament.

Advertisement

However, the next question - the first being the passage of the Bill itself - is the government's ability to implement the law from the targeted date of April 1, 2017. With just nine months to go, no rules in place yet, writing of the software a work in progress, and no movement on purchase of hardware, it will require the Centre and states to do some heavy lifting if they are to meet the ambitious deadline.

A Maharashtra commercial tax officer, for instance, says it will take not less than six months to get the system in place after the rules are finalised. "If the rules are not finalised by September, it will be difficult to get the system ready by April next year," he says. This, when Maharashtra has a robust and automated commercial tax system. Some states do not even have a fully-computerised tax system.

Advertisement

While the common IT platform, the interface and the back-end are the core of the GST system, training of tax officials from the Centre and states is equally important for seamless transition from the current value-added tax, or VAT system, to the new regime.

"Though VAT and GST are not very different, the processes are different. So, you have to train the officers," says Kumar of GSTN.

The work for training officials has started. The department of revenue has started a programme for training state and CBEC officers in the legal aspects of the GST law. For new technology, GSTN has drawn up a training programme and hopes to start from August. There are around 100,000 tax officers in states and at the Centre. GSTN alone can't train them all. So, it plans to teach some master trainers. These trainers - 300 in total - will then train 1,500 officers of states and the CBEC. For taxpayers, GSTN will work with trade associations.

For now, it's over to the Rajya Sabha.

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