Computerization Program Preparing for GST Commissioner of Sales Tax, GST Network (GSTN) & Computerization Program Preparing for GST 2nd June 2012 Sanjay Bhatia, Commissioner of Sales Tax, Maharashtra

GST Current status Discussion paper on GST published in November 2009 Constitutional amendment bill being evaluated by Standing Committee Computerization for GST in initial stages through Empowered Group on IT infrastructure (Nilekani Committee) and Mission Mode Project.

Need for Computerization VAT experience VAT from 01.04.2005 without computerization Geographical administration changed to functional administration Mandatory assessment replaced by assessment / audit by exception Single point levy at first stage replaced by multi point levy of tax thereby ITC claimed at each stage of sale Legacy of huge return default and incorrect and incomplete filing of returns

Need for Computerization As quality data not available and automation was not in place so implementation of VAT became very difficult. Steps taken for computerization Correct and complete filing of returns ensured through electronic filing ITC verification ensured through electronic cross checks using electronic sales and purchase annexure CST form distribution mechanism established through online electronic application E-payment of tax made mandatory Other e-services like e-registration ECS of refunds etc., started This computerization took 4 to 5 years after VAT introduction. VAT experience has taught that computerization is a must for smooth implementation of GST

Computerization Initiatives At national level MMP and TINXSYS teams conducted study on status of computerization in different states _ States at different level of computerization Maharashtra, TN, Kerala, AP, Karnataka and Gujarat ahead of other States EC and GOI set up Empowered Group on IT infrastructure(EGIT) for implementation of computerization under the Chairmanship of Mr. Nandan Nilekani

Empowered Group On IT Members comprise of CBEC, Dept Of Revenue and State Commissioners . Concept paper prepared on opening national level common portal for e-services. Uniform systems of Registration, Return filing and e-Payments to be made available on this portal to all the States Cafeteria Model for automation i.e. other services to be provided on payment basis through common portal Computerization to be implemented through national level GST Network (GSTN)

GSTN Background Empowered Committee approved creation of SPV, a non-Government Company registered under the Companies Act, 1956 Key objective to provide shared infrastructure and services to Centre and State Governments

GSTN EC consensus on having Common Portal providing three core services common across the country Dealer registration, Tax payments and Returns acceptance EGIT to evaluate suitable agency for incubating the National Information Utility (NIU) for GST. National Securities Depository Limited (NSDL) was selected as technology partner for incubating NIU to operate the IT backbone for GST”. EGIT, CBEC, JWG of EC and NSDL have evolved a strategy for implementing GSTN

GSTN Area of Operation Three options Full Service Model-full range of GST services Limited Service Model- Only Registration, Returns and Payment on GSTN Application Programming Interface (API)-Operational flexibility to states but adhere to common process

GSTN Action Plan Build efficient and convenient interfaces with tax payers tax administrators and other stakeholders like banks, CBDT etc. Facilitate, implement and set standards for providing common GST services to the centre and state Government. Carry out research, study global best practices and provide training to the stakeholders

GSTN Functions Tax Payers management including account management, notification, information, status tracking. Tax Authority Account / ledger Management Computation of settlement (including IGST settlement ) among centre and states Processing and reconciliation of import GST and integration with Customs EDI systems MIS including need based information and business intelligence Maintenance of interfaces between the common portal and tax administration systems

GSTN Functions GSTN portal will be launched to provide information to taxpayers Updated information about Act, Rules, Notifications, Circulars, procedures would be available Portal to be integrated with automation systems of all states

GSTN Present Status Central Portal under development by NSDL Online Registration application ready Eleven states identified for pilot project. States in the process of modifying their applications in line with GST procedures. UAT set up being prepared. - Following options being explored- Shared UAT set up by NSDL Cloud services by BSNL GSTN to be operational by August 2012

GSTN Process of actual setting up of GSTN is on GSTN to first handle:- 360° Pilot Project of Maharashtra & its expansion to other states. TINXSYS Management of Pilot Project of 11 states.

Scope of Work Development of Registration Module and migration of dealer registration data Development of Return Filing and processing including ITC matching Development of payment Module Development of IGST settlement Module Providing MIS

Way forward – for Pilot PAN Updation by States / UTs States / UTs to estimate efforts for modification to existing VAT systems Setting up of Test Set-Up by States / UTs Modify the State /UTs VAT System Establish interface with the common Portal Invite Dealers / Vendors for testing the modules Banks to make necessary system changes to CBS Full round of testing by all entities All 35 States / UTs sensitized regarding GST Pilot and related activities Existing dealer data received from 33 states / UTs /Centre analyzed and shared ( 2 UTs have no dealers)

Challenges in GSTN Finalization of common Registration, Return & Payment format. Setting up of GSTN IGST settlement Getting all PANs Handling of legacy data Passwords for 60 Lac dealers Interface with state’s existing systems.

Challenges/Issues in GST Handling of issues of administration (Dual Control) Interstate transactions – whether IGST? Interstate transactions - Settlement mechanism RNR ( Revenue Neutral Rate) issues. Differential thresholds

Thank You

Registration Process Features On line registration Single application – Centre, State & across the States Mandatory PAN No physical record Defined uniform process Status tracking system Time bound registration Online amendment Possibility of ‘No registration certificate’ – status check online

Returns Process Features Common portal to accept return Mandatory e-filing and e-payment Single return in each State for Centre, State & all Acts Returns along with annexure containing sale-purchase details Help available for e-filing Revision of returns Annual audit report instead annual return