What Is Goods and Services Tax Network(GSTN)?
- September 29, 2020
- Posted by: Editorial Team
An Overview of GSTN
So far, the center and state indirect tax administrations worked under different laws, regulations, procedures, and formats, and consequently they have independent IT systems. Integrating them for GST implementation and bringing them under an entirely new indirect taxation system and administration need a fresh institutional arrangement. For this task, the government has created the Goods and Services Tax Network (GSTN). The Goods and Services Tax Network (GSTN) is a non-government and a non-profit private limited company that was established in order to provide both front-end and back-end IT and infrastructural support for the effective functioning of GST. GSTN is registered as a non-profit company under the New Companies Act in March 2013.
Goods and Service Tax (GST) was the largest indirect tax reform to have taken place in the history of India’s taxation system. This indirect tax reform mandated the integration of an entire nation’s diverse tax portfolio into a single taxation system. This also brought upon a massive complexity in developing an IT platform, to handle not only the diverse tax systems of all 36 states, including its Union Territories (UT) and union government but also had the necessity in providing a single interface for more than a crore taxpayers’ for their GST compliance functions.
Thus, the Goods and Services Tax Network (GSTN) was entrusted to build such a platform to service the need for a diverse set of stakeholders.
Responsibilities of Goods and Services Tax Network
- Goods and Services Tax (GST) system application design, development, and operation
- Taxpayer migration from the erstwhile regime to the GST regime
- IT infrastructure procurement, commissioning with state-of-the-art security apparatus
- Systemic resilience against failures and disaster recovery mechanism
- Help-desk setup and operations
- Training and capacity building
- GST eco-system creation and management with GST Suvidha Providers (GSPs)
- Back-end system for 27 states and Union Territories (UTs) for an assessment appeal, etc.
GST was successfully rolled out on 1st July, 2017.
Goods and Services Tax Network (GSTN) – Objectives Since its Inception
GSTN has established with a vision to become a trusted National Information Utility (NIU) which provides reliable, efficient, and robust IT backbone for the smooth functioning of the goods/commodities and services Tax regimen enabling economic agents to leverage the entire nation as one market with minimal indirect tax compliance cost.
GSTN works for GST in India with these objectives in mind, which you can read below:
(a) Provide a common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders for implementation of the Goods and Services Tax (GST).
(b) Provide a common registration, return, and payment services to the taxpayers.
(c) Partner with other agencies for creating an efficient and user-friendly GST ecosystem.
(d) Encourage and collaborate with GST Suvidha Providers (GSPs) to roll out GST Applications for providing simplified services to the stakeholders.
(e) Carry out research, study best practices, and provide training and consultancy to the tax authorities and other stakeholders.
(f) Provide efficient back-end services to the tax departments of the central and state governments on request.
(g) Develop functionality such as a Tax Payer Profiling Utility (TPU) for both central and state tax administration.
(h) Assist tax authorities in improving tax compliance and transparency of the Tax Administration system. Also, deliver any other services of relevance to the central and state governments and other stakeholders on request.
Important Features of GSTN
Below there is a few important features of the GSTN you can look at
The Indian government’s stake (at 49%) far exceeds that of any single private entity. It also enjoys complete strategic control through Board composition and shareholder agreements. The privacy and security of taxpayers’ data are guaranteed because of this structure.
Robust and Dynamic
The GSTN portal was a challenge to develop and roll out. But today, it can handle complex IGST transactions, thanks to its strong IT infrastructure. In addition, it also allows for extremely fast data exchange between the GST portal and taxpayers. The immense volume of transactions per second is also managed easily by the GSTN.
The expenses of the GSTN are apportioned between Central and State governments in a 1:1 ratio. States share expenses depending on how many taxpayers are active in the state. These expenses include not just operating expenses such as rent, salary, and IT facilities but also fraud analytics, security audits, etc.
Functions of GSTN
The GSTN as a back-end infrastructural support mechanism has the main responsibility of providing a well-built IT infrastructure and the related services to the Central and State Governments, taxpayers, and other stakeholders, for the implementation of GST. GSTN would be integrating the common GST portal and will be connected with the existing tax administration IT systems.
Administrative functions of GSTN
GSTN as a tax administration platform has a deep connection with the existing administrative mechanisms. The common GST Portal developed by GSTN will function as the front-end of the overall GST IT eco-system. The common GST portal by GSTN will process applications for registration, payment, return, and prepare MIS/ reports.
Similarly, the IT systems of the Central Board of Excise and Customs (CBEC) and state tax departments (except Model I state) will function as back-ends. The work of back-end operation is to handle tax administration functions such as registration approval, assessment, audit, adjudication, etc. Fifteen Model, I state and CBEC are developing their own back-end systems as per the available information. This means that GSTN is doing the back-end for the remaining states and union territories (UTs).
The following are the primary functions of GSTN:
(i) Facilitating registration
(ii) Filing and forwarding the returns to central and state tax authorities
(iii) Computation and settlement of International Goods and Services Tax (IGST)
(iv) Matching of tax payment details with banking network
(v) Providing various Management Information System (MIS) reports to the governments
(vi) Analysis of tax payers’ profile
(vii) Running the matching engine for Input Tax Credit (ITC)
What is GST Suvidha Providers (GSP)?
GSP, which stands for GST Suvidha Providers, is an accumulation of third party IT vendors who develop the web or mobile interfaces for taxpayers in order to easily interact with the GST network.
How to Get in Touch with GSTN
You can easily contact GSTN via e-mail, phone, or by visiting their physical office address which you can see below:
Goods And Services Tax Network,
World Mark – 1,
New Delhi – 110037