We can create GSTN identity for 90% of taxpayers anytime: Navin Kumar

Navin Kumar
Chairman, Goods and Services Tax Network

Take us through the GSTN journey so far.

We started from scratch in May 2013. At that time our target date was not clear.

We were told for the first time in October 2014 that April 1, 2016, was our target date. It was then we started the recruitment process, as we had already built the organisation structure.

Our first challenge was to prepare for the RFP ( request for proposals) in the absence of a GST framework. It was unclear what we should put in the RFP and what work we were supposed to do.

We took the permission from the stateempowered committee of finance ministers to work on the draft and had appointed PwC as our consultant. We floated the tender in April 2015 and selected the vendor, Infosys, in September 2015.

In November 2015, we gave the work order. According to the RFP, the vendor (Infosys) will provide us the support for five years from the date GST is rolled out. In between, we had interacted with the industry and went to Nasscom asking its members for suggestions and feedback about their needs and what could be the likely interface.

What was the industry feedback?

We were stunned by their feedback. We had told them we wanted to work on a built- own- operate- transfer ( BOOT) model. They said, thank you very much. The companies said they had burnt their fingers, and the BOOT model was dead and buried.

They cited instances where they had built the system, operated it but were still not getting the revenues because of various reasons. They said if you want to build the system, you have to pay the pre- operative cost, which is the capital cost.

There were instances when the central and the state governments had floated tenders and no one came to bid for them. The industry gave around 1,500 inputs and suggestions. We took most of them into account.

Did such meetings help?

We held a pre- bid meeting and incorporated their suggestions in the RFP through corrigendum. Finally, the big five — Microsoft, Tech Mahindra, Infosys, TCS and Wipro — sent their proposals. It was achallenge for us to select one because all the proposals were really good.

Where do we stand today on software development?

Prototyping of the user interface is almost over. Code writing is also half done. The software will be first tested by Infosys and then by us. The process will begin in October and last till January. We gave Infosys a go- ahead to purchase hardware a day after the Rajya Sabha cleared the GST Bill. Once the software is loaded and tested, we will take a final approval from the Standardised Testing Quality Certification ( STQC).

The approvals are expected by midFebruary. And then, we will have dry runs till March.

When will the migration of existing taxpayers take place?

Those who already pay VAT, service tax and central excise tax will be subsumed in the GSTN. Later other, small taxes, such as entertainment tax and luxury tax, will be migrated to GSTN. The current taxpayers will not be asked to register again. They will be asked to provide their PAN and be given a unique identification number under the GST. Currently, 6.5 million people pay value added tax, 2.5 million people pay service tax and another 300,000400,000 people central excise tax. We have already validated PAN of 90 per cent of these taxpayers and we can generate their

GSTN number any day.

With the Rajya Sabha passing the goods and services tax ( GST) Constitution amendment Bill, the focus has shifted to the Goods and Services Tax Network ( GSTN), the non- profit organisation that is building the information technology architecture. It will be the backbone of the reform, slated to be rolled out next year. NAVIN KUMAR, chairman, GSTN, tells Sahil Makkar and N Sundaresha Subramanian that his organisation was not caught by surprise by the quick turn of events. It is confident of putting in place hardware and software requirements.

Almost 70% of start-ups globally will fail: Infosys co-founder Kris Gopalakrishnan

Infosys Co-Founder and former CII President Kris Gopalakrishnan on Monday, said almost seventy per cent of start-ups globally will fail and only five to ten per cent will become large and scale up.

"Almost seventy per cent of start-ups will fail. About 20% will survive but will not grow. They will remain small enterprises, and may be only five to ten per cent will become large and scale up - that is the spastics globally," he told reporters at the announcement of the 12th Innovation Summit 2016 here, of which he is the chairman.

This should not, however, be treated as a concern or a challenge, but it is a part of natural process of evolution, he added.

"The key is what are the learnings, and how do we continue to nurture this," he said.
Asked who has made a mark globally as of now, Gopalakrishnan said Flipkart and Snapdeal have made a mark and may be in three to five years from now, people would start talking about these companies in a big way.

"I would say Flipkart and Snapdeal - these companies have made a mark. Paytm and Freshdesk - there are so many of them actually. They have made a mark and that process will continue. May be three years from now and five years from now, you would start talking about these companies in a big way," he said.

Asked if it is a worrying factor that most of the e-retailers are not making profits, Gopalakrishnan said there will be some consolidation and hoped some Indian-started entity will remain because global domination is possible in the internet field as it is not bound by any borders.

"When you look at transport, hospitality, logistics - these are the companies, which will be the names in future in years to come," he added.

Replying to a query, Gopalakrishnan said both private equity and venture capital funding has slowed down for different reason because the exits are not happening.

"Both private equity and venture funding have slowed down for a different reason because exits are not there. When this happens, money is not recycled," he said.

"Most of the venture funds are waiting for some exits to happen and the exits are happening through mergers and acquisitions - consolidation where you may no be able to get the full value of investment," he said.

Asked if he sees a Google-type company emerging out of India, Gopalakrishnan said, "Yes it is possible, but we also need to remember that, across the world there is one Google."