NEW DELHI: The number of such states has increased four-fold to 21 from only six; Karnataka & Tamil Nadu building their own tech back-end.

In less than three years, there has been a four-fold jump in the number of states which are shedding their inhibition and have asked the Goods and Services Tax Network (GSTN) to handle their complex back-end processing when the revolutionary tax reform rolls out from April 1, 2017.

GSTN is a not-for-profit entity owned by the Centre, states and non-government financial institutions, and is building the technology backbone for new tax regime. According to a government official, a total of 21 states are now relying on GSTN to manage back-end tasks such as tax settlement, assessment, refunds, etc. The number of such states was only six when GSTN was first set up.

"More and more states have realised now that they can just reply on the common application that GSTN is building instead of building their own technology systems," said the official. The person who did not wish to be quoted said that smaller states such as Arunachal will benefit hugely out of it since it doesn't make sense for them to take the effort of appointing an agency and spend on building the technology just for a few thousand tax payers.

While large states such as Uttar Pradesh, Bihar and Odisha had already joined GSTN, states such as Rajasthan, Madhya Pradesh and Punjab which had earlier decided to build their own systems have also agreed to ride on GSTN technology now.

Bihar was one of the early big states that decided to not build their own technology and relied on GSTN. Sujata Chaturvedi, commissioner and principal secretary, commercial taxes, Bihar said that it was the most "practical" thing to do.