As India gets prepared to stroll into new indirect taxation era, one must not overlook the fact that GST implementation would wholeheartedly be reliant on the IT infrastructure. The GST system calls for automation of all the functions associated with compliance across the country; therefore, experts have warned that a minor glitch in IT infrastructure might lead to chaos! Herein, the need to rope in an expert entity, or incorporate one, which can handle, manage, and monitor all the automated functions associated with tax compliance and administration, was felt across the country. That’s why, the Goods and Services Tax Network (GSTN) was incorporated on March 28, 2013, under new companies Act, Section 8.
What exactly is GSTN?
GSTN is a non-government, private limited company that has been incorporated predominantly to ensure robust IT infrastructure for the successful implementation of GST across India. The non-government financial institutions hold 51% equity in GSTN. Out of the remaining 49%, the Government of India holds 24.5% equity, whereas all the states of India, union territories, and the Empowered Committee of State Finance Ministers hold the rest of the 24.5% equity in GSTN.
GSTN would provide immaculate IT services to the competent governments (Centre and States) as well as taxpayers so that they can perform all the crucial tax compliance functions with utmost ease. In other words, the GSTN would ensure an adroit platform for all the stakeholders in the GST Ecosystem (Central and State governments, RBI, taxpayers, ITes companies, and taxation authorities) so that they can develop automated communication with each other through single dashboard as and when required.34
GSTN has been working towards setting up a National Information Utility (NUI) or a Common Portal from where taxpayers across the country can handle, manage, and perform compliance functions. The Common Portal would act as a strategic interface between all the stakeholders in the GST Ecosystem (namely taxpayers, RBI, tax authorities, competent governments, and so on.)
The portal would be touchpoint for all the compliance related functions discussed below.
- Ensure GST return filing timely: For any business firm, the first and foremost thing in the GST ear would be to ensure filing of returns timely. The common portal can guide them how to fill various return forms in the specified format(s) so as to ensure utmost compliance with the set of new compliance rules.
- Taxpayer registration: So far, more than 60 lakh taxpayers have already enrolled with GSTN portal, but the process of applying for GST registration has been put on hold temporarily. The portal can guide all the taxpayers how to apply for GST registration in the most competent manner.
- Tax payment: Tax payment is yet another crucial function that taxpayers can perform through this portal. Importantly, the portal is programmed in such a manner that it can notify the taxpayers about the amount of tax that is to be paid before any specific time period to maintain distance with threats of non-compliance.
- Getting Input Tax Credit: During the GST era, taxpayers would need fill a specific form to claim any input of credit for the tax that has already been paid. These forms would be available on the common portal, and there are various regulatory guidelines that users can refer in order to claim ITC in an immaculate manner.
- Maintaining Cash Ledger and Liability Ledger: During the GST era, all the cash ledgers and liability ledgers of all the taxpayers and business entities would be maintained in electronic format. The common portal will save those ledgers.
- MIS reports for taxpayers: The common portal will generate Management Information System report on a timely basis so as to help taxpayers know precise details about their compliance. Importantly, these MIS reports can help taxpayers take informed decisions at the right time.
- Keeping track of status and returns: Last but not the least, the common portal can help taxpayers keep track of their return filing status. This is yet another crucial feature of the common portal that can help taxable entities monitor their overall compliance competently. Furthermore, it can help them improve their GST compliance rating.
In a few words: GSTN is taking several crucial and pragmatic actions to ensure immaculate IT services to government as well as taxpayers. The Network has also undertaken myriad of strategic steps to evaluate the robustness of its IT infrastructure so as to ensure successful implementation of GST.