Infosys gets a month to fix GSTN glitches

Group of ministers, led by Bihar Deputy Chief Minister Sushil Kumar Modi, to hold review meeting every fortnight

The group of ministers (GoM) constituted to look into technical glitches in the Goods and Services Tax Network (GSTN) has identified a set of common issues after talking to corporate entities such as Unilever, various state tax department officials, and tax consultants. At its first review meeting in Bengaluru, the GoM asked vendor Infosys to fix these glitches by October-end.

Led by Bihar Deputy Chief Minister Sushil Kumar Modi, the GoM will review progress on this task every fortnight.

Since Friday, GSTN officials met several large enterprises including Unilever, over 80 tax officials from various states and interacted with tax consultants who help file returns for the nearly 8.5 million taxpayers registered with the indirect tax system.

Infosys officials were also involved in identifying the set of universal glitches: Inability to rectify errors, lack of forms, issues regarding processing applications, and bugs in the software that slow the system.

Traders have complained that it takes as much as 12 hours to update a form, and in many cases, the site is inaccessible. This has had an impact on the filing of returns.

Nearly 8.5 million traders have registered for the GST across India. This includes about 2.3 million new ones who have come into the system.

For July, around 4.7 million traders had filed the returns; for August, so far only 0.3 million have filed returns.

Modi appealed to dealers to not wait till the last day to file returns. He added the heavy rush to meet the deadline would put pressure on the system.

“It is like building the ship while sailing,” said Modi, “Any system will take time to stabilise. Efforts are now on to find solutions to the problems.”

The other members of the panel are Karnataka Agriculture Minister Krishna Byre Gowda, Telangana Finance Minister Etela Rajender, GSTN interim Chairman A B Pandey and GSTN Chief Executive Officer Prakash Kumar.

Infosys, which had claimed that it was ready with a robust system before the GSTN roll-out, was represented at the three-hour-long meeting by its interim Managing Director and Chief Executive Officer Pravin Rao and independent board member D N Prahlad. They assured that the company would put in resources to fix the glitches soon.

“All decisions taken today (Saturday) — timeline and solution for problems — will be discussed again in the next meeting,” said Modi.

In September 2015, Infosys had won the Rs 1,380-crore contract to implement the GSTN and maintain it for five years. Asked whether Infosys had failed in delivering the project, the largest such system in the world, Revenue Secretary Hasmukh Adhia said, “I don’t think they have failed. There are initial issues and hiccups. There have not been large-scale failures.”

Experts, however, felt addressing the glitches was the need of the hour.

“A few of the key problems, such as deregistration or the refund mechanism for exporters, should be given preference. While the government is making efforts to resolve these problems, the businesses are also required to upload the data on time and not rush only at the last moment,” said Abhishek Rastogi, partner, Khaitan and Co.

Pratik Jain, partner and leader, indirect tax, PwC, said, “The speed with which the GSTN monitoring committee was constituted and held its first review meeting was encouraging. Hopefully, the committee has got a 360-degree view of all the issues and challenges. It would be good if list of these issues and expected date of resolution is published for public consumption, which will allay some bit of anxiety that industry has.”

Responding to a question on whether the GST Council was thinking of doing away with frequent rate changes, Modi said, “The Council is competent enough and mandated to take up the issues of GST rates. If the Council feels the need to change the tax rates of some items, so be it.”

Some industry captains have raised concerns over the changing GST rates. Among them, Hyundai, on September 12, had flayed frequent changes in tax rates on automobiles, saying investment on new products and technology will be adversely impacted in the absence of consistent and long-term policy.

No extension for filing GSTR-3B after December

The government on Saturday ruled out any further extension of timeline after December for filing GSTR-3B tax returns by businesses. GSTR 3B is a simple return form introduced by the CBEC for July and August, following the roll-out of the goods and services tax (GST) from July 1.

“We have already extended the period for GSTR-3B. People have to file their own self-assessed summary return till December, and there will not be any extension of time as far as GSTR-3B is concerned,” Revenue Secretary Hasmukh Adhia said.

The GST Council had earlier allowed businesses to file GSTR-3B till December.