Unique Identification Authority of India (UIDAI) Chairman Nandan Nilekani has told the finance ministry that IT infrastructure for the Goods and Services Tax (GST) would have to be rolled out on a priority if the government wanted to introduce the proposed indirect tax by April 2011.

Unlike in the present system, where the Centre and the states have separate IT platforms, he said, both would have to work together on the IT structure for GST.

Nilekani, also the chairman of the Technology Advisory Group for Unique Projects (TAGUP), had two rounds of meetings on IT preparedness for GST with officials of the Central Board of Excise and Customs (CBEC) in the last one month. He will help the Centre and the states roll out IT infrastructure for GST in a time-bound manner. We had a good brainstorming session on how to go about it. He acknowledged that the time is less and a lot of work needs to be done at both the Centre and state levels, said a finance ministry official who attended the meeting.

Finance Minister Pranab Mukherjee had in his Budget speech this year announced the formation of TAGUP to look into various technological and systemic issues in five key areas Tax Information Network, New Pension Scheme, National Treasury Management Agency, Expenditure Information Network, and GST.

The official said GST had been identified as the most crucial of these areas.

In the two sessions with CBEC officials, Nilekani said the central and the state governments could not work in isolation on IT infrastructure for GST and that the system must be taxpayer-friendly to increase compliance. He said there should be a platform where the states IT team and the Centres IT team interact with each other and meet on a regular basis to share their views.

IT infrastructure will play a huge role in interstate GST. Inter-state GST (IGST) will be collected by the Centre and passed on to the states. It will have to be transferred electronically, another official said. He said the Centre had started working with the states to upgrade their IT infrastructure, which had to be developed simultaneously and uniformly in all the states, unlike in the case of IT structure for value-added tax.

The official said the Centre had broad IT infrastructure in place, but it was a major issue with states, especially in case of IGST. The Centres online tax payment application ACES will be tweaked a bit to take care of the GST but computerisation of states is the biggest concern. Maharashtra, Gujarat and Tamil Nadu are even ahead of the Centre, but a large number of states do not have the infrastructure.