‘66 Lakh Taxpayers Have Accounts On Our Portal’
As the country eliminates the tax web of state and centre and moves towards a unified single tax reform, managing 320 crore invoices every month puts a behemoth tasks on the shoulders of the IT infrastructure. Navin Kumar, Chairman, GSTN, which forms the IT backbone of the new tax regime, says that the system is designed with excess capacity to handle the data load and dismisses all doubts on the IT preparedness of the country.
Excerpts:
How ready is the GST Network for the GST Rollout from July 1?
There are two prerequisites for the roll out of GST from 1 July. One is to migrate all the taxpayers to GST and the other is to open the window for new registrations. The migration part started in November last year and out of the 80 lakh taxpayers of VAT, services tax and other, 66 lakh have activated their accounts on our portal and are being migrated comfortably. For the remaining 14 lakh, the window is opening today.
But we don't know why so many people have not come onboard, because we kept the window open for more than 6 months. One reason could be the raise in the threshold, which is now 20 lakh, against the 5 lakh earlier under VAT, in most of the states and 10 in others. Maybe, the remaining 14 lakh people, below 50 lakh, do not require migration because there is no liability for them to register. But we will keep the window open for the next 3 months and make sure whoever is left out or choose to migrate, is enrolled. In fact, in July, there is no activity planned, because the returns will come in September. So from that point of view, we are ready for the rollout.
When we talk about GSTN, we talk about mind-boggling numbers. Can you please take us through these numbers - number of transactions expected, number of personnel, number of users, number of tax officers etc?
As I told you, there are 80 lakh taxpayers and we expect a growth of about 5 per cent every year. Some of the sectors, not in the regime of tax earlier, are now coming under the GST bracket like textile, diamond, sugar and will add to the total number. We have around 60, 000 tax officers in the country, at present.
When we talk about the number of transactions, the GST law requires all B2B transactions to be imported at the invoice level, which means any registered dealer selling to another, needs to provide the data of the invoice. This is something new.
During the designing of the system, we had to provide an estimate of these invoices coming to our IT partners. We looked at some of the states who had started using the invoice data on an experimental basic, in anticipation of GST. The average number came out 127 per dealer, per month. Therefore, in order to have sufficient and excess capacity, we planned for 3 times this number. For 80 lakh taxpayers, this comes out to be 320 crore, which is my mind is well above the actual number of invoices that would be generated.
But after all, this is just an estimate. We will know the real thing only when the GST comes.
Why is e-way bill being deferred by a couple of months? What will be its ramifications? What's the progress on this front?
The GST council met and discussed it a couple of times, as we all know. All the decisions of the GST council have been taken by consensus. For this, perhaps some more time is needed. In the meanwhile, the council has decided that the existing systems in the states will continue. Many have their own transit system under different names like e-transit, sukandu and other, which will continue. The only difference is when the e-bill comes; it will be one uniform system in the country.
We expect 320 crore invoices to be uploaded every month by nearly 80 lakh taxpayers. How are the preparations for this mammoth exercise?
When we were designing our IT systems, IT partners wanted to know the load and the traffic. We gave them this figure and they designed the storage, compute capacity above this number. So as and when the traffic grows, we will be able to handle it. As I told you, the design is three times the actual number of invoices that we found with the states. So I think the system should be able to handle the load.
There are complaints by some that the system is down. Is that a problem you think?
The point is that out of 80 lacs, 66 lacs were able to come on the website, register and submit the application, get their provisional IDs. This means that the system is well at place and works. There may be problems, but we have a system for resolving all such kind of issues. When any user reports a problem, he goes to our helpdesk who further alert the IT team and the error is resolved. These kinds of problems can be easily addressed.
There are concerns over poor Internet connectivity in remote areas. Will that affect compliance under GST?
I don't think so. The connectivity is not that bad which is made out to be. The proof is that we analysed the data of the 66 lacs people who work on our website and found that they are not only from Delhi, Hyderabad, Chennai, and Mumbai but also from remote areas of states like Chhattisgarh, Jharkhand. This means, the issue of connectivity is not that big.
You must also realise, currently all the indirect taxes that are administered in the country are all computerised and returns need to be filed electronically. This has been going on, since the past decade. So this is not a big issue again from my perspective.
Many MSMEs are not ready for this GST transition. What do you think on this?
My feeling is that there is a fear of what is coming. In reality, the processes for the MSMEs are simple and we have made special arrangements for it. We have made an offline utility, available at our portal which has an excel sheet attached to it. As I mentioned earlier, in the new law, invoices' data need to be uploaded for the supplies made by the MSMEs to other businesses. Excel sheet is more familiar to them. All they need to do is upload the data and the utility will do the rest. They have the capacity to handle 19000 invoices at one time and this would take not more than a minute.
What about various states' preparedness, and how are you dealing with them?
Nine states and the central government are doing their IT systems themselves. The system that we have built is called the front end and the one connecting with the tax department is the back end. These 9 states and centre decided to do their own back end, but those who are different in terms of hardware, platform etc had to revamp. Today, their systems are connected with us and will be able to exchange the data.
So far as the other remaining states are concerned, we are doing the backend for them and no problem encountered there.
What were the major issues you encountered during the trial run?
Trail run was done to test the software and its expected output. Second, was the user's comfort. We got a very variable feedback on the usability from the tax payer's end where certain glitches were pointed out and resolved. So it was quite useful that ways.
What about issues concerning states like Jammu and Kashmir?
Jammu and Kashmir, the law is still not there, which is the main issue. Otherwise, we have connected our system and they themselves have their own IT system at place. So far as the system management is concerned, I see no issue.
