The government is preparing to invite bids for the operation of the goods and services tax (GST) tech platform with a new flexible task-based contract structure. The current contract with Infosys has fixed costs, but the government is seeking a more adaptable arrangement. The Goods and Services Tax Network (GSTN) is also considering whether to allow global companies to bid for the contract to address concerns about data localization. The new contract is set to begin on October 1, 2024, after Infosys’ current term ends.
The GSTN is creating a bid document to solicit interest from potential bidders and define the responsibilities for the next consultancy firm. The new contract structure will focus on flexible tasks rather than a fixed size contract. The move away from a fixed cost contract is due to the challenges of defining and accommodating changing requirements in the GST regime.
Infosys is expected to bid for the contract again as it has been a flagship project for the company. The contract is anticipated to be substantial in size and duration, with a period of seven years. The government aims to ensure adequate funding and size to prevent any potential cost overruns or contract size issues.
Since its introduction in July 2017, the GST regime has undergone several changes. The technology supporting the GST is expected to become more stable in the future. However, due to the dynamic nature of the GST and evolving requirements, it may take up to ten years for the full implementation of the concept.
The original tech concept for GST involved e-invoice uploading, creation of a mirror image, and matching the goods upon delivery to generate input tax credit. However, considering the challenges faced by industries in remote areas with unstable power supply, the adoption of e-invoices was delayed. The GSTN is currently finalizing the bid document and will take some time to invite interested parties.
The decision to allow global players to bid for the GST tech platform contract is still under discussion. Data confidentiality and localization will be key considerations in the decision-making process. Expert opinions will be sought to determine how multinational companies can ensure data localization through a contractual agreement. The GSTN board will evaluate the pros and cons before making a final decision.
Source: Moneycontrol