• Notification Date: 18-12-2023
  • Notification No: N/A

Govt considering Separate Bids for GST Hardware and Software Support in March

The government is aiming to invite bids for the next technology support provider for Goods and Services Tax (GST) in March 2024 and is mulling separate contracts for hardware and software consultancy providers to reduce dependency on a single entity, a senior government official said. 

The government has appointed Ernst & Young (E&Y) as its consultant for formulation of the Request for Proposal (RFP) to invite bids for the next IT consultancy for GST. The contract with Infosys for providing technology support for GST comes to an end from September 30, 2024. 

“We have started work on the request for proposal. Target is that by March we should be able to come out with it. Till now it has been a managed service provider model with Infosys, wherein the company is handling both hardware and software requirements. Now we are contemplating either to stick to the same or separate out software and hardware providers to reduce dependence on a single company,” the official reported. 

In the initial years due to the implementation issues in the GST, several glitches in the Goods & Services Tax Network (GSTN) surfaced for which the Finance Ministry had to depend on Infosys. In 2020, the government raised the issue with Infosys Chairman Nandan Nilekani to fix the glitches. Finance Minister Nirmala Sitharaman had asked Infosys to boost GSTN capacities to handle the heavy traffic on the GST portal. The government had to even extend the deadline for filing GST returns to resolve the technical bug around issues including login errors, auto logouts and delays in receiving on-time passwords (OTPs). 

"The flip side of having two consultants is that both vendors may have issues and blame each other for any shortcomings. So, we are contemplating it," he added. 

The government is discussing with E&Y the feasibility of having two GST support providers. The bids will be invited for a contractual period of seven years. 

The contract will be on a cost-plus model so that expenses for any additional work during the contract will be met separately by the government, he said. Over the last five years, the government has spent Rs 1,700 crore on Infosys on the GST technology support. Infosys won the Rs 1,380 crore contract to build and maintain the IT backbone for the regime in 2015. 

Since there will be no restrictions on global companies bidding for the contract, the government is hoping there may be some interested multi-national corporations (MNCs). “Since the basic complications during the initial years of GST are over, there will be only some additions and deletions in the system,” the official said. E-invoicing technology support will be the focus for the government going ahead. 

If needed, the government is also open to extending the Infosys contract by another six months, he added.