Infosys to give tech for GST

Company will operate the IT system for five years

Information technology (IT) major Infosys has won a Rs 1,400-crore contract from GST Network (GST-N) to build the IT system so that the goods and services tax (GST) regime is rolled out on schedule.

GST-N chairman Navin Kumar told Business Standard, “Our board approved the contract to Infosys last Friday. It is worth Rs 1,380 crore.”

The company is supposed to lay the IT-backbone to implement the GST regime.

Once the backbone is ready, Infosys will operate it for five years, Kumar said.

“After that, it will be seen whether we will have the in-house capability to operate it ourselves or hand it over to some other company,” he added. When asked if the network would be ready on time to ensure the rollout of the new indirect tax regime by April 1, 2016, in case the government decides to do that, Kumar said it was one of the conditions in the bidding.

“We are right on time. We had said in the request for proposal that the company who bids has to get the system ready by March 31, 2016. That is the condition. We will be ready to implement GST by April 1, 2016,” he said.

Four other IT companies — Microsoft, Tata Consultancy Services, Wipro and Tech Mahindra — were in race for the contract.

In 2012, Infosys had also got a contract to maintain and develop a website for the corporate affairs ministry for around six years.

The government plans to implement GST, which would subsume central excise, service tax and state-level value-added tax (VAT), besides other local levies, from April 1, 2016. However, it was not able to get the enabling Constitution amendment Bill passed in the Rajya Sabha in the monsoon session as it could not rope in the Congress to support the Bill in its present form.

The government had tried to reconvene the monsoon session and did not prorogue it initially. However, with the Congress not lending support, it prorogued the monsoon session earlier this month.

A strong technology backbone is essential for the successful rollout of GST across the country.

GSTN is a company formed to connect states’ databases with the Centre’s and provide IT infrastructure for seamless implementation of GST.

In the first stage, GSTN will create a seamless technology platform across the country. In the second stage, it will develop systems for assessing and auditing tax returns and filings.

In all likelihood, it may be mandatory for dealers having turnover of Rs 10 lakh or more to register with GSTN. Earlier, Kumar had said registration on GSTN would start by January 31, to prepare for a smooth rollout by April 2016.

“For registration, the target is to get it ready by January 31 so that there is two months’ time for testing. Payment and returns will follow months later, because the first return will be filed only in May,” he had said.

The Centre and the states have also agreed to equally share the costs incurred by GSTN.

For handling back-end operations, 13 states and a Union territory have approached GSTN for creating the IT platform, while the remaining states are developing the IT network on their own. States that have approached GSTN are Uttar Pradesh, Bihar, Odisha, Delhi, five north-eastern states, Himachal Pradesh, Uttarakhand, Puducherry and Chandigarh.

If some states fail to set up their own IT network on time, GSTN would be ready to assist them later.

New traders would have to register themselves. For existing traders, data will be migrated from VAT, service tax, and excise registrations.