A Guide to the Goods and Service Tax Network in India

On 1st July 2017, the taxation system in India underwent a revolutionary change. This new ‘one-nation, one-tax’ policy introduced the Goods and Services Tax (GST) to the nation.

This was followed by the creation of Goods and Services Tax Network (GSTN), non-government organization  and taxpayers to access information from a single source (GST Portal). The portal is well-equipped for filing taxes and returns. It adequately achieves the Goods and Services Tax mandate effectively. GSTN is a state of the art IT infrastructure implemented by the Center and State government for taxation purposes.

 

What are the Objectives of the Goods and Service Tax Network?

The following are objectives of the Goods and Services Tax Network (GSTN).

  • To integrate the GST Portal with existing tax administrations of the Centre and State governments and other stakeholders.
  • To integrate the Permanent Account Number (PAN) into the common portal for easy filing of taxes and enable a common platform for all States.
  • Facilitation, implementation and setting standards for providing services to the taxpayer, the State Governments and other stakeholders through a common GST Portal.
  • To build efficient and convenient interfaces with taxpayers in order to increase compliance.
  • To carry out research, study best practices and provide training to stakeholders.

The Goods and Services Tax Network is the back-end infrastructure for the effective management of tax-related data and GST reporting. This GSTN is a repository of the transactions and is of great importance to the country.

 

 

 

What is the Structure of the GSTN?

 

The GSTN is a non-government organization (Public-Private Partnership Company) with the private parties holding 51% stake while the government controls 49%. A capital of Rs. 10 crores has been authorised towards GSTN. This 49% is divided equally between Central and the State Governments that is, 24.5% to the centre and the states in the Indian Union. The GSTN is headed by Dr. Ajay Bhushan Pandey (Chairman) along with Shri Prakash Kumar as Chief Operating Officer of the GSTN.

The technical back-end has been contracted to Infosys. The GSTN has been granted a one-time investment of Rs. 315 crores from the Government of India.

While both the Center and State Governments hold 24.5% each, the other private entities make up 51%. NSE Strategic Investment, HDFC, HDFC Bank, and ICICI Bank hold 10% each while LIC Housing Finance Ltd holds 11% of the GSTN. However, discussions are ongoing to make the GSTN a 100% Government entity.

 

What are the Features of GSTN?

 

The Goods and Services Tax Network is a feature-rich platform for the digitization of the functions that are needed to implement GST. The key features of the platform are as follows.

National Information Utility

The Goods and Services Tax Network is a repository of reliable, robust and sensitive information. The IT infrastructure is designed to allow information to pass through the network which can be incorporated into financial products and services.

Strong Infrastructure and Complex Operations

Taxpayers can register themselves, pay taxes and claim GST returns. It is in charge of calculating Integrated Goods and Services Tax (IGST) along with the Input Tax Credit (ITC).

 

 

 

Information Security

The Central Government is a major stakeholder of GSTN. Hence, it shares a major responsibility for confidentiality as well as the security of the information provided by the taxpayers. The Central Government decides the composition of the board, mechanisms for the special resolutions, shareholder’s agreement and agreements between the network and other state governments.

Payment of Taxes

The GSTN enables taxpayers to pay taxes through online banking. RBI has appointed banks to accept payments towards GST. For those opting for this online payment, the process is simple. All they need to do is pay at the online portal of any one of the authorized banks as per RBI. Then, they can immediately download the challan.

Expenses

The end-user charges for GSTN are footed by the governments. The Central Government pays 50% of the charges while the remaining is proportioned among the States according to the relative taxpayers residing in the state.

 

 

 

What are the Main Functions of GSTN?

 

GSTN is the online channel for communication between the government and business taxpayers online. It is the facilitator of the IT ecosystem for GST. The GSTN processes over 2 billion invoices in a month. It has also processed tax returns for over 6.5 million unique users and this number is increasing rapidly.

Registration

Each business registered under the Indian Government is issued a Goods and Services Tax Identification Number (GSTIN). This registration is possible through the GSTN. Each verified registration is shared with the concerned tax authorities and the user is given a unique GSTIN.

 

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Invoice Matching

The network automatically detects any discrepancies in sale invoices so that taxpayers can claim for Input Tax Credit.

Filing of Returns

GSTN allows for a unified common return filing for all GST (Central GST, State GST and Integrated GST). Due to this, the need for multiple returns has been eliminated.

There are other functions that the Goods and Services Tax Network performs such as computation of IGST and settlement, taxpayer profile analysis, etc. The GSTN helps file taxes for each industry. However, GST on real estate will differ from GST on IT products. These intricacies are chalked out automatically by the GSTN.

With the advent of GST, it has become easy for the government to maintain records of taxpayers with ease. GSTN is the one-stop solution for all your tax problems. Known as the IT backbone of GST, it provides resources and power to the entire GST computing system.

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