Goods and Service Tax – GST – By: – Nagesh Bajaj – Dated:- 8-9-2011 Last Replied Date:- 30-12-1899 – IT infrastructure will be one of the basic requirements for successful implementation of Goods and Services tax. It should be well in place before introduction of GST. Based on the experience of different state governments, we can say that without an efficient e-governance it is not possible to administer value added tax regime effectively. The Input Tax Credit (ITC) is an important aspect of VAT and it is difficult to monitor ITC in the absence of fully developed computerized system. At present, the e-filing of returns as well as filing of various forms under VAT, excise duty and service tax is a bitter experience for the taxpayers. Inspite of the confirmatory claims made by both the central government and the state governments, the system is not adequate. The hardware developed is quite slow in responding to the taxpayers requirements. Not even hardware but software application is al
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dit of IGST while discharging his output tax liability in his own state. The centre will transfer to the importing state the credit of IGST used in the payment of SGST. The central agency will act as a clearing house. It will verify the claims and inform the respective governments to transfer the funds. Hence, there is maintenance of uninterrupted input tax credit chain on inter-state transactions. IGST model is completely a self-monitoring model. A close look on the IGST model suggests a facilitation of robust IT system with all the necessary information for computation of the tax credit. The most important task before the Empowered committee and the central government will be to build up information technology (IT) platform and infrastructure. The major responsibilities of IT infrastructural requirement will be shared by the central government through the use of its own IT infrastructure facility. The tax information network (TIN) system, built by NSDL for income-tax would be a right
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launch of GST. States don't possess an adequate IT infrastructure base in comparison to the Centre. It would create a great mess during functioning of IGST model. Hence, states should be equally equipped before introduction of goods and services tax. States should be merged into TIN, one by one, at an administrative level so that they get themselves accustomed with this network. While doing this state VAT should be kept apart. Conclusion: The system of IT infrastructure would be of much importance in the GST regime. If we will go into common market without adequate preparation and without a minimum level of e-governance across the states, there would be serious difficulties. So the government of India should take special measures to introduce computerization in tax administration in all states. Since new software application will have to be developed and installed within a short span of time there may be possibility of errors. It may take few years for settling down. LAWCRUX TEAM I
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