GST's Technology Backbone: Some Key Facts

by CXOtoday News Desk    Aug 05, 2016


As India prepares itself for Goods and Services Tax (GST) rollout that is expected to be implemented from April 1, 2017, the first question that comes to mind is whether the IT infrastructure is ready for such a massive rollout. Experts believe that a strong technology backbone is imperative for the successful rollout of GST. Well, the process has reportedly begun, with a team of technology specialists and tax experts working on a robust country-wide information technology network in order to make the rollout seamless, and this is possible through the GST Network (GSTN). 

Here’s all that you want to know about GSTN, the IT backbone of GST implementation:

Read more: GST Bill Passed: What It Means For IT Sector?

What is the origin of GSTN?

GST Network (GSTN), was set up as a non-government private limited company in 2013 to create a robust IT backbone to enable real-time taxpayer registration, filing returns, handling of invoices, executing inter-state tax settlements, and connect states for two-way data flow. GSTN is a company formed to connect databases of states with the Centre and provide IT infrastructure for seamless implementation of GST.

Which IT company is leading this initative?

India’s second largest IT firm, Infosys had bagged a mega contract to build GST Network (GSTN) system last year in September, beating its other rivals TCS, Wipro, Tech Mahindra and Microsoft. The tech major has prepared a software to enable the traders, manufacturers and service providers to register with the government with a GST identity code.

How would GSTN help in the seamless working of the GST bill?

GSTN would help in PAN-based registration of traders, besides filing of tax returns and payment system. In other words, the portal itself will be a one stop for filing and processing of all taxes for almost 65 to 70 lakh tax-payers in the country and is being designed by a specialised design unit of Infosys. 

What is Infosys’ role in the process?

To run and develop the GSTN project worth Rs 1,380 crore, Infosys, India’s second-largest software company, has been assigned the task. Infosys, has prepared a software to enable the traders, manufacturers and service providers to register with the government with a GST identity code. Navin Kumar, Chairman of GST Network told Hindustan Times, “The system which is being prepared by Infosys is 60 per cent through and will be ready to be rolled out by December-end.” Apart from that, the revenue department has already started stakeholder consultation with the industry in Hyderabad and Jaipur. 

Who will share the cost burden?

The Centre and the states have agreed to equally share the costs incurred by GSTN. A sub-committee would decide on the sharing of the costs between the states.

How will the GSTN work?

Users will have the option to either file their taxes themselves through the portal or use the services of accountants who can use the portal on their behalf or deploy their own software. The portal will allow new businesses to register using their PAN and mobile number or Aadhaar number. All businesses will be given a GST identification number, which will be a 15-digit code, consisting of their state code and ten digit PAN.