New Delhi, June 27: The nation is gearing up for the rollout of Goods and Services Tax (GST) on July 1 which will absorb a slew of indirect taxes like service tax, value added tax, central sales tax, central excise, etc. It has been reported that filing a tax return on the Goods and Services Tax Network (GSTN) portal by an entity will cost Rs 55 a month. The good news is that the Centre and State will bear this entire burden to reduce the burden on taxpayers.
At present, there are about eight million taxpayers across the nation and filing tax returns for all of these taxpayers will be borne by the Union and the state governments. As per a report by Business Standard, about 6.6 million taxpayers have already migrated to the GST portal and received provisional identification. The migration to the GST portal is however compulsory for dealers with an annual turnover of more than Rs 20 lakh to register.
How will the Centre and States pay the pay GST Network costs?
- The total cost has been calculated over the eight million taxpayers
- The cost of each taxpayer will be split between the Centre and states monthly.
- The cost per state will be calculated on the basis of the number of taxpayers in that state and will be shared with the Centre.
- The Centre will pay the GSTN over Rs 23 crore a month.
- The Centre and states will pay Rs 550 crore to GSTN for the expenses incurred this financial year.
Besides salaries for the staff, the Rs 550 crore revenue will go towards repaying a loan from IDFC. The GSTN had taken the term loan earlier this year which is needed only till rollout of the portal. This move, will, however, lessen the burden on the assesses and will ensure the revenue flowing for GSTN. The total cost of the project was estimated to be Rs 3,000 crore which covers salaries, interest cost, security operations for five years of operation. The GSTN portal had given a contract of Rs 1,320 crore to IT giant Infosys for a period of 5 years to build and maintain the IT network.
The government had a shareholding of 49 per cent and private shareholding of 51 per cent in the Goods and Services Tax Network (GSTN) portal which was incorporated in March 2013 as a private limited company. It has been reported by Business Standard that ICICI Bank, HDFC Bank, LIC Housing and NSE Strategic Investment Corporation are 10 per cent stakeholders each while the rest 49 per cent is held by the central and state governments, each holding 24.5 per cent
The main aim of the Goods and Services Tax Network (GSTN) is to provide a common platform for registration for the filing of returns and e-payment and this, in turn, will ensure the revenue flowing for GSTN. This fiscal year, the Centre and the States will pay Rs 550 crore to GSTN for the expenses incurred this financial year.
— As reported on www.india.com