“The order for hardware was placed in August this year after the Constitution Amendment Bill was cleared by Parliament slightly behind our expectation of placing the hardware order by December last year,” said Navin Kumar, Chairman, Goods and Services Tax Network (GSTN). In an interview withBusinessLine, Kumar, who is overlooking the rollout of the IT infrastructure for the goods and services tax (GST), is, however, confident that the GST network will be ready in time, by April 2017. Excerpts:
Is GSTN prepared for the rollout from April 1, 2017?
The progress is quite good. We signed an agreement with Infosys in November 2015 and they have completed about 60 per cent of the work. The issue for GSTN was whether to begin work on both the hardware and software simultaneously, as is done in other projects. But since the Rajya Sabha was still considering the Constitution Amendment Bill for GST, our Board advised us to start the application development and order the hardware once the Bill was cleared. We consulted the government and they also agreed with the approach.
Consequently, our hardware got slightly delayed. It was in August this year, as against our expectation of December 2015. But we are hopeful that all the equipment will be imported, installed and tested by December. By then, the software will also be ready. We will have a beta run from end-February to end-March. It is a tight time schedule. But we have done a lot of work; we are ready for the rollout from April 2017.
The first part of our software will be ready by the end of October and we will begin migrating over 80 lakh existing taxpayers of value added tax, service tax and central excise to GSTN. We are generating ID numbers and passwords for them and they can log on to our system and familiarise themselves.
In the last meeting of the Empowered Committee, States were concerned about the interest rate being charged by GSTN…
About 550 crore is the capital cost of the project from the 1,380-crore project awarded to Infosys. Later, the Centre asked us to take a loan for this, and we changed our revenue model. We decided to build the repayment liability in the user charge and charge a penal interest rate of 12 per cent for States who made late payments. But the Empowered Committee said we cannot do interest arbitrage. If we borrow at 9 per cent, we should charge the same rates to States.
We have agreed and the new revenue model has been approved.
Companies have said they require at least two to three months advance time to get their systems in place before the rollout of GST…
The issue is that the model GST laws are not yet finalised. The business processes have been put in the public domain so companies have a basic idea of the new tax system. But, until the model laws for Central, State and integrated GST are not ready, they can’t modify their systems and processes. We hope they will have about four months’ time.
GSTN is also providing back-end support to a number of States. Will there be a clash for States who build their back-end infrastructure independently?
The government wanted to know the preparedness of the systems of the States when we began work on our RFP (request for proposal). We estimated that almost two-thirds of the States would not be ready in time. Initially, 12 States including UP, Bihar and Odisha had approached us. We will offer one uniform system for all States. As of today, 24 States are working with us.
There is no problem for States who build their back-end infrastructure on their own. We have already published our APIs, which they can follow. We are also holding workshops with States almost every month. Source -http://www.thehindubusinessline.com [21-09-2016]