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The States have given in principal nod for information technology (IT) infrastructure for Goods and Services Tax (GST) better known as GST Net.
The IT infrastructure mainly involving the common portal is to be used for registration, payment and returns facility for the traders.
The States have also agreed to use Permanent Account Number (PAN) as common registration number for traders. This development is likely to facilitate the smooth roll-out of GST.
This has happened at a time when the Centre and the States are still to arrive on a consensus to implement the GST. The Centre has proposed to implement the new indirect tax system from April 1, 2012.
The Chairman, Empowered Group on IT Infrastructure on GST, Mr Nandan Nilekani said, “Even though GST may be some time away, creating an institutional arrangement will help the migration from VAT to GST. Tomorrow when all the States start using PAN as common registration number, this will bring all the tax agencies on the same platform.”
Maharashtra and 10 other States have started a pilot project for the new IT infrastructure and the results have been encouraging.
Mr Nilekani also disclosed that a Special Purpose Vehicle (SPV) will be formed for the new IT infrastructure. After approval from the Union Cabinet, a Chief Executive Officer (CEO) will be appointed.
Confirming the agreement on IT infrastructure, the Chairman, Empowered Committee of State Finance Ministers, Mr Sushil Kumar Modi said, “I am optimistic, if the way things are going and if everybody co-operates, we will catch the time line.”
Though he refused to give a new timeline for GST implementation, he reiterated that since this is a Constitution Amendment Bill, the Central Government will have to be flexible and address all the concerns of the state governments.
Overseas Experience
The Empowered Committee will be going on a four-nation tour to get first hand experience about GST. “From September 7, nearly 15-16 State finance ministers will be visiting Belgium, Luxumberg, Spain and France,” Mr Modi Said.
FICCI's Submission
Meanwhile, the industry chamber FICCI stressed the need to bring down rates under the proposed indirect tax regime to a uniform level of 12 per cent.
“The proposed rates of 20 per cent, 16 per cent and 12 per cent are good enough to begin with, but these would need to be gradually brought down to a uniform level of 12 per cent,” said the FICCI President, Mr Harsh Mariwala.
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