Cabinet approves Rs 2,256-crore makeover for IT for GST

 NEW DELHI: The Union Cabinet has approved strategic disinvestment of Bharat Pumps and Compressors and closure of Hindustan Cable, moving the needle on the government’s ambitious plan to shed loss-making public sector enterprises.

The Cabinet has also approved a Rs 2,256-crore makeover of the IT backbone for indirect taxes in anticipation of the Goods and Services Tax ( GST).

Niti Aayog, the government’s think tank, has identified around 40 companies for strategic sale and a closure policy for loss-making PSEs has also been announced. A land management agency will also be appointed to overlook the sale of freehold land in such cases.

The government will pitch in with a Rs 4,777-crore package before shuttering Kolkata-based Hindustan Cables that was set up to produce telecom cables for staterun telcos BSNL and MTNL. The cash infusion will be Rs 1,310 crore while balance Rs 3,467 crore will be in the form of non-cash infusion via conversion of government loan to equity.



The secured creditors led by SBI have also agreed to a one-time settlement of Rs 306 crore.

The Cabinet Committee on Economic Affairs ( CCEA) also gave an in-principle approval for strategic disinvestment of Allahabad-based Bharat Pumps and Compressors. The government will pitch in with Rs 112 crore as non-plan loan to the company to settle its statutory dues.

IT UPGRADE FOR GST
The CCEA also approved a Rs 2,256-crore project to improve IT capabilities of the indirect tax administration ahead of the GST rollout. The cost of ‘Project SAKSHAM’ will be incurred over seven years. The new indirect tax network of the Central Board of Excise and Customs ( CBEC) will support larger number of taxpayers.

“Introduction of GST will result in a several-fold increase in the number of taxpayers and resultant document load on the system. CBEC’s current IT system was set up in 2008. It cannot cater to the increased load under GST without an immediate upgrade of its IT infrastructure,” the government said in a statement.

One of the crucial requirement is to integrate CBEC’s IT systems with the Goods & Services Tax Network (GSTN) for processing of registration, payment and returns data sent by this system that will be the face of the new tax.

RUSSIAN OILFIELDS
The CCEA has also approved the purchase of stakes in Russian oilfields by a state consortium comprising Oil India Ltd (OIL), Indian Oil Corporation Ltd (IOCL) and Bharat Petro Resources Ltd (BPRL).

The consortium will pay Rosneft, the Russian national oil company, $2.02 billion for 23.9% stake in Vankor and $1.24 billion for 29.9% in Taas-Yuryakh fields.