The government is looking to invite bids so as to function the goods and services tax tech platform that is laid on the flexible task structure, opposite to the current contract within the tech giant Infosys where the cost is stable at a fixed price, as per two officials.
The Goods and Services Tax Network (GSTN) is contemplating the possibility of allowing global companies to compete for the contract due to concerns regarding data localization. This new contract will come into effect on October 1, 2024, once Infosys’ current term expires.
GSTN is currently in the process of preparing the bid document to invite interested bidders. They intend to outline the scope of work for the next consulting firm. In terms of the bidding process, they are exploring a different approach, aiming for a flexible task-based contract instead of a rigid, predetermined one.
Back in 2015, Infosys secured a contract worth Rs 1,380 crore to construct and maintain the IT infrastructure for the GST system.
The official mentioned that in a fixed-cost contract, it’s challenging to determine the exact resource requirements since the work isn’t initially well-defined and often undergoes changes.
Important: GSTN Searches Company to Prepare Bid Documents for a New Service Provider
The official also stated that Infosys is expected to participate in the bidding process once more because the GST project is a flagship undertaking for the company.
“It will be a substantial and extensive contract in terms of size and scope. GSTN will ensure that the contract is adequately funded and sized to avoid issues related to cost overruns or the contract’s size in the future. The contract duration will span seven years,” an official stated.
Expectation of Stability
Since its introduction in July 2017, the GST regime, aimed at streamlining indirect taxes, has `undergone numerous revisions. The technology supporting it is expected to become more stable moving forward.
“It will take a decade for the complete implementation of the GST concept to be justifiably realized. During this period, frequent changes will occur. Fixed requirements even for a six-month period cannot be guaranteed; it’s an impractical expectation. The initial rollout of the new indirect tax system lacked full technological detailing. On day one, the GST was expected to be implemented, but the legislative framework was constantly evolving, requiring the backend to catch up,” an official explained.
The original GST technology concept included the uploading of e-invoices, creating a mirrored record, ensuring matching upon goods delivery, and facilitating input tax credit (ITC) without discrepancies.
However, from the industry’s view in remote regions with unreliable power supply, the movement of goods would have been hindered in the absence of e-invoices.
So, an official said, “At the beginning of GST, we stumbled backwards, saying that we would go for complete technology later.
The second official informed that “the bid document is still under development and it will take some time for the GSTN to invite interested parties.”
Whether international companies will be permitted to submit bids for the contract is still up for debate.
In the previous round of bidding, only domestic companies were allowed to participate. However, we will now reconsider this restriction due to concerns about data confidentiality. We will seek input from experts on how to guarantee data localization when working with a multinational company and whether we can legally enforce this requirement through a contract. The GSTN board will make a decision after thoroughly discussing the advantages and disadvantages of this approach.
