GST NETWORK
GSTN stands for Goods and Service Tax Network (GST Network). It is a non-profit, non-government company jointly promoted by central and state governments. This organization is responsible for providing shared IT, infrastructure and services to central and state governments, taxpayers and other stakeholders.
All the front – end activities carried out by a taxpayer on the GST portal like filing returns, making tax payments, registering for GST etc. are provided by the GSTN. This means that GSTN acts as an interface between the government and taxpayers.
STRUCTURE OF GST NETWORK
Private players own 51% share in the GSTN, and the rest is owned by the government. The authorized capital of the GSTN is ₹10 crore (US$1.6 million), of which 49% of the shares are divided equally between the Central and State governments, and the remaining is with private banks.
The GSTN has also been approved for a non-recurring grant of Rs. 315 crores. The contract for developing this vast technological backend was awarded to Infosys in September 2015.
The GSTN is chaired by Mr. Navin Kumar, an Indian Administrative Service servant (1975 batch), who has served in many senior positions with the Govt. of Bihar, and the Central Govt.
| SHAREHOLDER | SHAREHOLDING |
| Central Government | 24.5% |
| State Governments & EC | 24.5% |
| HDFC | 10% |
| HDFC Bank | 10% |
| ICICI Bank | 10% |
| NSE Strategic Investment Co | 10% |
| LIC Housing Finance Ltd | 11% |
| Total | 100% |
SALIENT FEATURES OF THE GST NETWORK
The GSTN is a complex IT initiative. It will establish a uniform interface for the taxpayer and also create a common and shared IT infrastructure between the Centre and States.
- Trusted National Information Utility
The GST Network has been deemed to be a trusted National Information Utility(NIU). This essentially means that the network is in charge of providing reliable, robust, as well as, efficient IT infrastructure and information passing.
- Handles Complex Transactions
GST is a destination based tax. The adjustment of IGST (for inter-state trade) at the government level (Centre & various states) will be extremely complex, considering the sheer volume of transactions all over India. A rapid settlement mechanism amongst the States and the Centre will be possible only when there is a strong IT infrastructure and service backbone which captures, processes and exchanges information.
- All Information Will Be Secure
The government will have strategic control over the GSTN, as it is necessary to keep the information of all taxpayers confidential and secure. The Central Government will have control over the composition of the Board, mechanisms of Special Resolution and Shareholders Agreement, and agreements between the GSTN and other state governments. Also, the shareholding pattern is such that the Government shareholding at 49% is far more than that of any single private institution.
- Expenses Will Be Shared
The user charges will be paid entirely by the Central Government and the State Governments in equal proportion (i.e. 50:50) on behalf of all users. The state share will be then apportioned to individual states, in proportion to the number of taxpayers in the state.
| VOLUME OF EXPENSES | TYPE OF EXPENSES |
| Maximum expenses | IT system designed by Infosys |
| 2nd part | Fraud Analytics Tools, security audit and other security functions(will be outsourced based on tender) |
| 3rd part | Operating expenses such as salary, rent, office expenses, internal IT facilities |
- Payment
The GST network has enabled the taxpayers to avail the option of payment through online methods.
- Online payment can be done via the option of internet banking. The RBI has allocated certain banks (Agency Banks ) with the authority to collect payments made in favour of GST. The taxpayer will need to make payment by selecting from a list of the agency banks authorized to collect the tax. After that, the taxpayer needs to login to the respective bank’s online portal and make the payment and download the challan generated for said payment of GST.
- Offline- It is not mandatory that the taxpayers have to make an online payment always. The government has also facilitated the provision of payment of GST offline via “over the counter” payments. You can head over to your respective bank make the payment for GST. Bank will further notify the RBI as well as the GST portal to update relevant details.
FUNCTIONS OF GST NETWORK
GSTN is the backbone of the Common Portal which is the interface between the taxpayers and the government. The entire process of GST is online starting from registration to the filing of returns.
It has to support about 3 billion invoices per month and the subsequent return filing for 65 to 70 lakh taxpayers.
The GSTN will handle:
- Invoices
- Various returns
- Registrations
- Payments & Refunds
Registration
The GST network is an online portal which can help the taxpayer looking to register GST under the new taxation laws. GSTN issues the GST Identification Number to the respective taxpayer and updates the information with respective Tax authorities once the registration has been verified.
Invoice Matching
GST network basically tallies the purchase invoices with the sale invoices to check for discrepancies and matches them so that the taxpayers can avail the benefits of Input Tax Credit.
Return Filing
The GST network forwards and processes the returns to both the central and state tax authorities. in GSTN, there is a unified common return filing for all types of GST i.e. CGST (Central GST), SGST (State GST), IGST (Integrated GST). This eliminated the need for filing multiple returns.
Taxpayer Profile Analysis
When the taxpayer wishes to register for GST, their particular details are verified, and the details are then put forth to the Central as well as the state government tax authorities.
Additional Duties
In addition to managing the basic tax filing and tax returns, there are a few responsibilities which come along with managing taxation, these are as follows:
- Computation of IGST and Settlement
- Integrating Banking Network with tax payment details
- Manage Computation Engine of Input Tax Credit
- Submit MIS reports to the Government
GST NETWORK INFRASTRUCTURE
The GST portal developed by the GST network serves as a front-end to the IT ecosystem of tax payment in India. The IT systems of the CBEC (Central Board of Indirect Taxes and Customs) and individual state tax departments will function as a back-end to the systems. The CBEC and State systems will act as an intermediary for the following tax administration processes: registration approval, assessment, audit adjudication.
The front end system of GSTN will provide for the following functions :
- Filing Registration Application
- Filing returns
- Challan Creation for Tax Payment
- IGST payment settlement
- Generation of Business Intelligence and Analytics
Item-level details in invoices with the reconciliation of sales register with auto-populated purchase register and auto reversals will be key data processing requirement under GST compliance. Having the ability to reconcile invoices with sales registers, auto-populated purchase registers, and ITC reversals will be essential under GST compliance.
Sale and purchase transactions data that will be uploaded by the taxpayer to the GSTN portal will, for the first time, contain a Combination Key comprised of the supplier’s GSTIN, invoice number, financial year, and HSN/SAC Code. This will make each line in GST database unique. Correct data entry of this key field will, therefore, be very important for taxpayer compliance. Wrong data feeding in this important field may result in mismatches between seller information and the buyer’s claim for GST credit, and, unless rectified, eventual denial of credit to the buyer. For this aspect of GST compliance, support from enriched APIs (Application Programming Interfaces) is of great value to taxpayers.