The Empowered Committee of State Finance Ministers today gave its in-principle approval for creation of a portal, 'Goods and Service Tax Network' (GSTN), which is expected to provide an interface to all stakeholders and avoid evasion in indirect taxation systems.
A special purpose vehicle (SPV) will be set up for introducing the information technology infrastructure (GSTN), which is based on recommendations made by a group chaired by Nandan Nilekani.
In a meeting of the state Finance Ministers here, Nilekani, who chairs the Empowered Group on IT Infrastructure for GST, gave a presentation on the subject. "He (Nilekani) gave a presentation of the subject and there was an in-principle approval by the Empowered Committee on this portal," Bihar Deputy Chief Minister Sushil Kumar Modi, who is also the Chairman of the Empowered Group of State Finance Ministers, said.
"This (portal) will be set up as a company and we will finalise the details of that company soon," Nilekani said. The SPV called GSTN (Network) will be owned by the three stakeholders; the Centre, states and technology partner NSDL.
"Even pending the coming of GST, this company in the short-term, will be used by the state governments and the central government to see how can you have a common entity registration across the country using the PAN number and also to make sure that tax payments across the different tax authorities are able to get synergy to ensure that there is no tax evasion," Nilekani said.
He also briefed the State Finance Ministers with regard to the GST pilot project currently under way involving the Centre and state tax departments.
"When the GST comes, it will be a common portal for returns, registration, payments and for MIS (monthly income scheme). This is a very important step because for the first time you will have common PAN based registration across the country for all taxpayers and you will be able to reduce tax evasion by watching the tax returns to different tax authorities," he said.
He said all indirect taxes like customs, service tax, excise and VAT will be paid using the same taxpayer identification. When asked about the formal inauguration of the company, Nilekani said this will be done, once final details are worked out and it receives in-principle approval of the Union Finance Ministry.
IT framework for GST assumes importance as the deadline for introducing the new tax regime draws closer. Finance Minister Pranab Mukherjee in his previous budget speech had stressed on the need for creation of IT infrastructure for an effective tax administration.
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