Implementation of GST's tech network may see minor delays

New head to be appointed for the empowered committee of state finance ministers, as incumbent Abdul Rahim Rather lost Jammu & Kashmir elections

Implementation of the goods and services tax network (GSTN), the technology backbone of the massive tax reform, might see minor delays, as the empowered committee of state finance ministers, which has to take some key decisions about the project, does not have a chairman.

Abdul Rahim Rather, the Jammu & Kashmir (J&K) finance minister who was heading the panel, lost an election to the Assembly from the Charar-e-Sharief constituency last month.

Currently, GSTN, a company set up for rollout of the technology infrastructure, is in the process of appointing a vendor and designing the Request For Proposals (RFP). Officials hope to finalise tender details by the next month, if certain key issues, such as the payment model for technology companies, are finalised.

The body is currently deliberating on whether the users — 65 dealers of the GST portal — could be charged a nominal fee for filing their returns or will the states compensate. “The empowered committee has to decide that. Let’s hope they elect a new chairman quickly,” said a government official.

Some of these decisions are important for implementation of the project, as the selection process cannot start till the revenue model for the technology service provider is agreed upon.

GSTN is evaluating the possibility of charging users to pay for the exceptionally heavy technology infrastructure involved in setting up an integrated network for India’s most ambitious indirect tax reform.

Before formation of GSTN, a Cabinet note had proposed a self-sustaining revenue model, under which a company could charge both taxpayers and tax authorities — that is, states and the Central Board of Excise and Customs (CBEC). But it is not clear if state governments would agree to the proposal and how taxpayers would react, given that people do not have to pay for filing returns.

Rather’s loss came at a time when the committee had to placate some states, such as West Bengal and Tamil Nadu, that were opposing the existing constitutional amendment Bill to implement GST.

The Left Front’s Asim Dasgupta, then finance minister of West Bengal, was the committee’s chairman since its inception to 2011. He was followed by the Bharatiya Janata Party’s Sushil Kumar Modi (Bihar) and then Rather. Under Rather’s chairmanship, Union Finance Minister Arun Jaitley was able to broker an agreement with states on the indirect tax regime, before tabling a constitutional amendment Bill on that in Parliament.

The government has indicated a deadline of April 1, 2016, for rollout of the project and GSTN hopes to start testing the system by early January next year, provided there is no further delay.