Implementation of GST in India

The BJP government at the centre had targeted the implementation of GST from April 2016. However, there has been a delay in the passing of the GST bill in the Parliament. The chances of getting the bill passed in the Winter-session of the Parliament are also looking bleak. This delay will cause the GST implementation to miss the April 2016 deadline and spill over to the year 2017.

For the implementation of the GST, the GST council will be set up as the 122nd constitutional amendment is ratified by both the houses of Parliament and 50% of the state governments. After the Presidential approval for the tax reform the GST council will start its working. It will work on the approved bill and draw out the guidelines for its introduction.

The GST implementation is planned across the country in one go. It means that all the states and union territories will implement the GST at the same time. There cannot be a situation where there are some states which are not ready to implement the GST and others who are behind schedule. The partial implementation of the GST will only result in chaos and defeat the purpose of the whole exercise.

Two important areas were identified, where the preparation was felt lacking for the implementation of the GST. One of them is the IT infrastructure and the other is the skill set of the people involved. GSTN which is a non-profit, non-government, private limited company was set up in 2013 with the sole purpose of providing the IT network framework and software solution for the implementation of GST. It has already placed the order for the IT software system for GST with a private reputed organization Infosys.

GSTN is also carrying out a hand holding exercise for around 12 states to get their IT infrastructure upgraded for running the common GST software system. 10 states have taken the onus upon themselves to upgrade their backend. All states have the basic computerised system running for VAT, but there is a variation in the level of sophistication which needs to be brought at par.

Central Board of Excise and Customs (CBEC) has taken the initiative to train the staff to develop the required skills for the GST roll out and implementation. It had set up an exclusive directorate for the training of the officials. The first batch of the 500 officers who got the training is now imparting it further and the chain is multiplying. In all likelihood by the time the GST council gets into action the entire staff would have got the training.

The service tax is likely to become a part and parcel of the GST. Thus, CBEC is also working on the challenges of the reorganization that would be required. It proposes to retain the three tier system of Commissionerates, divisions and ranges. The GST Commissionerates will replace the stand-alone service tax Commissionerates. For the redressal of the issues pertaining to GST the system of Commissioner (Appeals) is likely to be continued. To further strengthen the system there is a proposal to create a National Tribunal with linkage to the states.

The preparation for the GST implementations is on track and is benefiting from the delay in the passage of the bill.