Aug 03, 2016, 03.14 PM | Source: CNBC-TV18
Speaking to CNBC-TV18 Nandan Nilekani, former chairman of the Unique Identification Authority of India, said he believes the government will listen to all stakeholders and devise a simple system for the GST rollout.
Speaking to CNBC-TV18 Nandan Nilekani, former chairman of the Unique Identification Authority of India, said that the backend IT has been put in place well ahead of GST rollout. If GST is rolled out, it is believed that tax experts will have to cope with cumbersome procedures. Nilekani said that a lot of business rules can be implemented through technology. He believes that laws should be drafted in a way that simplifies the ease of doing business. He believes that the government will listen to stakeholders and devise a simple system. The role of Aadhaar will play a role, however small, he said, as small businesses will come under the GST net. Below is the verbatim transcript of Nandan Nilekani's interview to Surabhi Upadhyay on CNBC-TV18. Q: Goods and service tax (GST) is what we are all talking about and we could finally see movement after a decade long wait. Do you think this has the potential to perhaps revolutionise the indirect tax landscape of the country? A: Absolutely, the GST will make India single market for goods and services, reduce transaction cost and enable business to grow. A critical part of that will be the proper implementation of the GST Network (GSTN), a technology company that is building the platform and making everything paperless, so that is a very important part of achieving this goal. Q: You were at the forefront of the creation of that IT infrastructure for the tax framework, so what do you think even if we get the legislative changes out of the way, is the backend IT backbone in place to roll out this tax? A: I think creating the technology infrastructure for GST well ahead of time was thanks to the foresight of Pranab Mukherjee who was the finance minister at that time and he setup a committee under me to create this body and it is a unique body, which is owned by the central government and the state government and by some financial institutions and excellent leadership -- Chairman Navin Kumar, Prakash Kumar is the MD. So they have done a lot of work and we have implemented a lot of thing and I am very confident that they will be ready in time for the launch date whenever it is. Q: How was your experience in creating that GST IT network, was it difficult to build a bridge between central and state governments? A: I have to get everybody aligned, but I was very fortunate that I have worked with two finance ministers, Pranab Mukherjee and P Chidambaram and I worked with two empowered committee chairs, Dr Asim Dasgupta of West Bengal and Sushil Modi of Bihar and both of them were very supportive. Because of the support both from the finance ministers as well as the empowered committee, we were able to come up with a very state-of-the-art design of GST, which was approved by the EC about 3-4 years back, so that is what is now getting implemented. Q: Specifically about the IT sector, tax experts have been pointing out that the industry might have to cope with slightly more cumbersome procedures. For example, some experts have been saying that let us say for instance if Infosys wins a contract from maybe a State Bank of India (SBI) then the company might have to make separate invoices for each state. So, is this how you are reading the picture as well, is it going to be a bit of deterrent for the IT sector? A: I don't know the details but obviously the law should be drafted in a way that it simplifies the ease of doing business and the law should be drafted keeping in mind that we will have a very advanced technology and a lot of the business rules can be implemented through technology. That is what needs to be done. Q: What about e-commerce because that is the next big concern. E-commerce companies will come under the tax ambit and there is a widespread belief that they will be adversely impacted, it will perhaps increase the compliance burden because it is going to be calculated on the transaction value according to the model law. Is this again a big concern? A: I have not paid attention to these kind of things. I do hope that the government will listen to all the stakeholders and design a simple, transparent, efficient tax system using technology. Q: What do you see will the role of Aadhaar be in the entire implementation process? A: Aadhaar to the extent that there are individual tax payers many small businesses will come into GST because service tax on many small businesses and often they are run by one man entrepreneurs who may use Aadhaar number. So, it is not directly there but it can play a role in simplifying the whole thing.