Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Study shows only 3 states IT-ready for GST roll-out

Jun 21 2014, 08:11 IST
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SummaryPrime Minister Narendra Modi, who promised to take every effort to create a single national market

Prime Minister Narendra Modi, who promised to take every effort to create a single national market for goods and services through a unified indirect tax system, has a mammoth task to put its backbone — the IT infrastructure — in place, show data on goods and services tax (GST) preparedness of states.

As of now, only three states are fully equipped with the IT infrastructure for trader registration, filing of returns and receiving taxes and granting tax credits. While Maharashtra and Kerala receive all returns of manufacturers and dealers in electronic form and accept electronic payment, Gujarat has achieved 90% compliance in electronic payment and full compliance in electronic registration. Only seven states currently accept all value-added tax returns in electronic form.

Study

Also, the GST Network, the Centre-state special-purpose vehicle for the IT platform, still doesn't have an office, let alone the CEO, executive director and vice-president of finance it has been asking for. The Centre and the state governments have to make GSTN, an IT interface between taxpayers, banks and tax departments, fully functional in addition to upgrading state tax administrations capable of linking up with the GSTN.

GSTN, sources said, needs to fill at least 80 posts urgently by way of deputation and from the open market.

The private limited company has an equity capital of Rs 10 crore and has a self-sustaining business model, which would mean states have to give a user fee to access data from the entity. The company needs to have its systems as well as revenue stream ready to take its work to the next stage.

One area where more needs to be achieved is verification of the Permanent Account Numbers (PANs) of traders so that PAN-based national registration of traders can be established. Verifying that the PAN quoted in various financial transactions is the same as the one quoted in tax returns and in dealer registration records is crucial for checking tax evasion and in creating a single market. A pilot study by NSDL, a shareholder in GSTN, showed that states are at different stages in ensuring that dealers have given their correct PAN in state registration records. Maharashtra accounted for the highest degree of compliance in this area (see table).

Besides lack of administrative speed, political differences among states also hamper the plans to put in place the pan-India IT network.

The Centre offers funds to

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