The government on Wednesday cleared an IT project Saksham, which will integrate tax systems of the Central Board of Excise and Customs (CBEC) with the Goods and Services Tax Network (GSTN) for a smooth roll out of the new indirect tax regime from April 1, 2017. The project, cleared by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi, will cost around Rs 2,256 crore to be spent over seven years.
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Set up in 2008, the IT system of the CBEC will not be sufficient to cater to the increased workload expected under the GST regime. The Saksham project would step up the department’s technological capabilities in line with the GSTN, which provides the IT backbone of the new indirect tax regime.
“The implementation strategy for the project will be to ensure readiness of CBEC’s IT systems by April, 1, 2017, when GST is to be introduced. The upgrade of the IT systems will be carried out while keeping the existing tax-payer services running,” the government said in a statement. There is no overlap in the GST-related systems of CBEC and GSTN.
The project will help in implementation of GST, extension of the Indian Customs Single Window Interface for Facilitating Trade (SWIFT) and other taxpayer-friendly initiatives under Digital India and ease of doing business of the CBEC.
“All taxpayers/importers/exporters/dealers under various indirect tax laws administered by CBEC — presently about 36 lakh — are likely to go up to over 65 lakh after introduction of GST,” the statement added.
CBEC’s IT structure needs to integrate with the Goods and Services Tax Network (GSTN) for processing of registration, payment and returns data sent to CBEC as well as act as a front-end for other modules like audit, appeal and investigation.
“This IT infrastructure is also urgently required for continuation of CBEC’s e-services in Customs, central excise and service tax, implementation of taxpayer services such as scanned document upload facility, extension of Indian Customs SWIFT initiative and integration with government initiatives such as e-nivesh and e-sign,” the statement added.
The government decision on IT systems integration two days come ahead of the second meeting the GST Council scheduled on Friday. In its first meeting, the GST Council headed by Finance Minister Arun Jaitley had agreed on issues regarding the exemption limit, dual control and base year for compensation to states.
The Council decided to fix the exemption limit for the indirect tax at Rs 10 lakh for northeastern states and smaller states and Rs 20 lakh for other states along with decision to subsume all cesses into GST. The Council also made a headway on the issue of dual control between states and Centre by allowing states to have administrative control over assessees with annual turnover of less than Rs 1.5 crore.