New Delhi, Oct 7 (IANS) The Empowered Committee of State Finance Ministers on the Goods and Services Tax on Wednesday recommended that the Reserve Bank of India’s e-Kuber solution be used for consolidating and settlement of accounts under the GST system.
“The RBI should play the role of an aggregator through its e-Kuber system. Such role will facilitate participation of larger number of banks in GST receipts enhancing convenience for the tax payers and provide single source of information for credit of the receipts to government accounts and thereby simplifying accounting and reconciliation tasks,” the panel said in its report.
E-Kuber, the RBI’s core banking solution, is designed as an integrated payment and receipt mechanism.
In three reports relating to registration, payment process and refunds in the GST, the committee suggested that internet banking, over the counter payment and Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) mechanisms used to transfer funds, should be extensively used to facilitate payments.
The GST seeks to create a single Indian market by subsuming most indirect taxes levies of the central and state governments, such as excise duty, service tax and value-added tax that is seen as facilitating tax compliance, and curbing inflation through better supply chains.
The central government has set the target to reform India’s indirect tax regime from April next year.
But securing legal sanction for GST is proving a lengthy process, given the BJP’s lower
strength in the upper house as bill being a constitution amendment bill, needs passage in parliament with two-thirds majority, following ratification by at least 15 state legislatures, before it can be sent to the president for his assent.
On procedures for getting registration, the committee said that “all the taxable persons shall interact with tax authorities through a common portal called GST Common Portal that would be set up by Goods and Services Tax Network (GSTN)”.
The portal will have backend integration with the respective IT systems of the central and state governments, it said.
The EC recommended that the tax payer be required to obtain state-wise registration. Within a state, the taxpayer could either opt for a single registration or multiple registrations for different business verticals, it said.
The cabinet has given gave its nod to some changes recommended by a parliamentary panel, notably an extra 1 percent levy to compensate the states for potential tax losses.
According to the bill, an additional one percent tax would be levied when goods move from one state to another.
The opposition is mainly opposed to this proposal as they feel this would not only push up prices, but also have a cascading effect.