States, Centre agree on IT infra for GST

There is at least one aspect of the proposed Goods and Services Tax (GST) on which the states and the Centre have reached a consensus. The empowered committee of state finance ministers has approved the position paper of the Centre on the information technology (IT) network for the proposed indirect tax regime.

The position paper, prepared by Unique Identification Authority of India Chairman Nandan Nilekani, describes what the IT system will do and how it will operate. An approval at the higher level (by state finance ministers) had been given, said a finance ministry official.

The official said some states like Gujarat had a few doubts, but an in-principle go-ahead has been obtained. “They said why should there be duplication when some states already had a robust IT infrastructure?” the official added.

The Centre’s online tax payment application, ACES (Automation of Central Excise and Service Tax), will be modified for GST. The systems of states like Gujarat, Andhra Pradesh and Maharashtra, which are well advanced, may also be tweaked to simplify complex processes. This would be necessary to ensure was some uniformity across the states, said another official.

The government is floating a special purpose vehicle (SPV) for setting up IT infrastructure in GST. The SPV, called GST-N (Network), has the Union government, the states and technology partner National Securities Depository Ltd as its stakeholders. The SPV will first test the tax platform interface of the government with the taxpayer’s software. It will also test the Centre’s system with that of states. Facilitation centres will be made for businesses which do not have computers.

Work on processes like how returns will be accepted, how registration will happen and what kind of tax will be charged has already begun.

The finance ministry plans to put IT requirements, data structure and filing standards in the public domain much before the GST rollout, so that people get familiar with the system.

The IT infrastructure will play a huge role in inter-state GST. IGST will be collected by the Centre and passed on to the states. It will have to be transferred electronically.