Despite Politics, GST Backbone Is on Track to Achieve Target Date

Despite the political bickering , the GSTN company has been working to deliver the GST by 1 April 2017.

4 min read

Away from the public glare, a company set up by the government to create the logistical and IT backbone for the pan-India Goods and Services Tax (GST) regime will be ready to roll before the target date, because work didn’t stop even when political spats were delaying matters.

In fact, the Goods and Services Tax Network (GSTN) was set up as a non-profit, non-government company in March 2013, at least a year before the latest bill was drafted for the Constitution amendment for migration to GST.


The results are there for all to see and reap, the stakeholders said.

“We’ll start testing by October,” said GSTN Chairman Navin Kumar, referring to stage one of this exercise where existing payers of indirect taxes will migrate to the new system and tests will begin on the crucial software for the move to the new regime.

The hardware installation and software coding will happen by December. We hope to go for a beta run from February, which means our system should be ready by mid-February. The target date for the rollout is 1 April next year. Everything has to be ready before that. 
Navin Kumar, Chairman, GSTN Chairman

The company, which is based out of AeroCity on the outskirts of the capital, is uniquely structured: the Centre holds 24.5 per cent stake, the states and the Empowered Committee of Finance Ministers, as an entity, have another 24.5 percent, while the rest is with financial institutions.

Despite the political bickering over the bill, the company has been quietly working so as to be able to deliver by the 1 April 2017. It went ahead last year to float the tender to hire an IT company to execute the hardware and software side of the project, and awarded the contract by November.

Some big names in the business, including Tata Consultancy Services (TCS), Wipro, Tech Mahindra and Microsoft participated in the tender and ultimately Infosys, India’s second-largest IT company, bagged the Rs 1,380-crore project for a five-year period.

The IT company was mandated to build the technology infrastructure called the GST System Project (GSTSP), a common portal for the use of tax-payers, administrators and other stakeholders with common services for registration, returns and payments.

It takes a number of years for a mammoth task like this to become operational. So had we waited for parliament to pass it (the GST bill), we wouldn’t have been able to do it by the target date
Anita Rastogi, Partner for Indirect Tax with PwC

“Earlier this year, when the fate of the bill was in limbo, only the hardware procurement was put on hold. We told Infosys not to procure the hardware, but the software development was going on. We wanted to synchronise the developments with the live date for roll-out,” added Kumar.

Despite the political bickering , the GSTN company has been working to deliver the GST by 1 April 2017.
(Photo altered by The Quint)

Due to differences between the government and some political parties, notably the Congress that had wanted several of its suggestions to be incorporated in the GST bill, its passage got delayed and secured the requisite ‘ayes’ of the two houses only in the second week of August.


On the next steps forward, the GSTN chairman said some 100,000 officials will be given training beginning October. The migration of existing tax-payers will also commence simultaneously and conclude before February, and beta-runs will start by mid-February, before the April 1 target.

Our assessment is of around eight million taxpayers under the GST. But our system will be able to take a much larger load. We’re working out a substantially higher taxpayer base of 10 million to start with. 
Navin Kumar, Chairman, GSTN Chairman

Despite the political bickering , the GSTN company has been working to deliver the GST by 1 April 2017.
(Photo: The Quint)

The top official also explained that GSTN was initially mandated only for the preparation of the front-end of the network, that is, for the interface with taxpayers. But it has also simultaneously been working on the back-end for 21 states.

The new regime will involve two sets of identical taxes, the central GST and the state GST. The rate of tax will be fixed by the GST Council, which will primarily be co-opted from the Empowered Committee of State Finance Ministers with Union Finance Minister as chairman.

“When we started out, we were to build the common GST portal and applications for registration of taxpayers, filing of returns and making the tax payments. Later, 21 states and union territories requested us to take care of their back-end as well, which we are also doing,” Kumar said.

(Published in an arrangement with IANS)

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