It was in March 2013 that the GSTN was incorporated as a no-profit, non-government, private limited entity. The major chunk or 51% of the equity holding is with the non-government financial institutions. The central government together with the states and including Puducherry and Delhi hold 24.5% stake. The remaining 24.5% share is with the empowered committee of state finance ministers.
The creation of a central portal for the implementation of GST, where all the transactions would be centralized forms the base of the network. This being a specialized job the GST Network had proposed to outsource it to an IT company. If one goes by the latest news item that was doing the round on the news channels and stock market circles was that Infosys has managed to secure the coveted contract to develop and operate the technology platform for GST.
Infosys has bagged the order worth 1380 Crores and overcame the stiff challenge from the biggest names in Indian IT like TCS, Wipro, and Tech Mahindra and US technology giant Microsoft. The statement by Navin Kumar, the Chairman of the Goods and Services Tax Network confirmed the development and also stated that the system will be developed and operated by Infosys for a period of five years.
The proposed IT system for GST will present a standard interface where the taxpayer would be able to register, file returns and pay tax. It will also create a common shared platform between the Centre, States and other bodies like the RBI.
The biggest challenge for the GST Network team is the IT infrastructure in the states. Although all the states have fully computerised VAT systems but there is a variation in the level of sophistication. While Maharashtra and Karnataka take the lead, the north-eastern states have very basic systems in place. To be able to use the common GST portal it is important for the states to revamp their IT systems.
GSTN is carrying out a hand holding exercise for the states to upgrade their backend. Ten states including Punjab, Haryana and Tamil Nadu have taken the onus upon themselves with support from GSTN. Twelve states including six north-eastern states are taking the direct help from the GSTNetwork.
GSTN will connect the databases of the states and Centre. The permanent account number (PAN) will be the centre point for registration, filing of tax returns and acceptance of tax payments. The dealers with a turnover of 10 Lacs will have to register for GSTN. This registration will be automatically done within a period of 3 days without any pre-verification by the state government.
The strong technology backbone is very crucial for the successful for the GST rollout and a recent example of this is the GST implementation in Malaysia from April this year. The laggard states have to really come up to the expectations and meet the requirements of the GST portal integration in time. The recent political developments leading to the delay in the implementation of GST can be a boon for them.