GSTN - Goods & Services Tax Network in India

One of India’s most all-inclusive tax changes has been the Good and Services Tax or the GST. Apart from upending the entire tax regime, it has also provided businesses with a direct and transparent way to conduct trade and pay taxes.

Unlike the older tax system where taxes had to be calculated and assembled by different parties under the government, GST brought everything under a single central authority. It made things easier for every party and made the whole system subsumed.

Under GST, a single authority is responsible for calculating, collecting, and recording businesses’ tax filings. As everything was shifting towards digital, the government decided to make the GST digital as well. And for that, the GSTN was set up.

What is GSTN?

A non-profit and non-governmental organisation, GSTN or Good and Services Tax Network, is responsible for handling the complete IT system of the GST portal. This portal is the mother database for all things GST.

GSTN provides this service to the Central government as well as state governments. The governments use the database to track every financial transaction. Moreover, taxpayers also get provided with services like maintaining tax details, filing taxes, front-end services, and more on GSTN.

In short, GSTN acts as the interface between the taxpayers and the government and is the technology backbone for GST in India. GSTN was formed to satisfy the need for easy processing and exchange of information amongst stakeholders.

Characteristics of the GSTN

1. Handling complex transactions

Considering the volume of transactions all over the country, adjusting IGST (for inter-state business) at the government level can be excessively tedious. However, it is possible with a well built IT infrastructure and service, which makes the flow of information easy. And GSTN provides just that.

2. Security of information

As the government has strategic control over GSTN, it is vital to keep every taxpayer confidential. The central government handles the special resolution mechanism, composition of the board, and agreement of shareholders.

Moreover, they also have agreements made between other state governments and the network. Government holding too is at 49%, which is way more than that of any private institute. In this manner, GSTN provides India with a safe and secure network of taxes.

3. Sharing of Expenses

One of the best parts about the GSTN is that the user charges are paid in equal proportion by the Central government and state governments. They get paid on behalf of all the users. Afterward, the state share gets divided into individual states in proportion to the number of taxpayers.

4. Provides ease of payment

GSTN provides taxpayers with the convenience to make payments both online and offline. If users want to make a payment online, they can avail themselves of the same internet banking.

On the RBI guidelines, some specific banks have been allocated to collect the payments made pro GST.

Once the taxpayer selects the bank, they can log in to the bank’s online portal, make the payment, and download the receipt.

For making offline payment, taxpayers can use the over the counter provision allowed by the government. Otherwise, they can also make a direct payment at the respective bank’s branch. Once the payment is made, the bank would notify the GST portal and the RBI for updating the necessary details.  

5. Reliability

As the GSTN is a national information utility, taxpayers can easily trust it for being reliable and efficient. It provides smooth functioning of GST in the country. The network is also in charge of supplying seamless information passing and IT infrastructure, amongst other things.

6. Research and Development

Various stakeholders are looking to research numerous aspects of information technology and taxation. GSTN allows them to conduct that and also facilitates development. As both IT and Taxation are nascent in India, the research conducted via GSTN helps improve both the country and the economy.

Formation of GSTN

GSTN is a complex IT initiative. The thing that makes it stand out is establishing a uniform interface for the user and a shared IT infrastructure amongst the central and state governments.

The structure of GSTN is a unique one. 51% share is owned by private players, while the other 49% belongs to the government. Moreover, the authorised capital of the network is Rs. 10 Crore. 49% of the authorised capital gets divided between the Central government and State governments. Private investors share the other 51%.

The GSTN is currently chaired by Mr. Ajay Bhushan Pandey, while Mr. Shri Shankar Prakash is the CEO. Infosys supplied the complex technological backend to the GSTN in 2015.

Responsibilities and Duties of GSTN

• GSTN forms a channel of communication for the business taxpayers and the government online. It is the frontend of the ecosystem for IT.
• The GSTN processes more than 2 million invoices per month and returns around 65 Lakh users.
• Here are some of the key responsibilities and duties that GSTN is in charge of in our country.

1. Registration

As mentioned above, GSTN is an online portal that acts as the interface between the government and taxpayers. Under the GST, every taxpayer needs to be registered. By issuing a unique GST identification number to each taxpayer, GSTN facilitates the filing of information with the respective tax authorities once the user’s registration is verified.

2. Matching of invoices

GSTN also ensures that purchase invoices tally with the sale invoices by delving deeper. This tallying gets done to ensure that there is no omission or mismatching. However, if there are any irregularities, the network fixes them so that the taxpayers can get the benefits of ITC or Input Tax Credit.

3. Filing various returns

GSTN is responsible for both processing and forwarding the returns. It furthers the returns to both the Central government and State government. However, what’s interesting about GSTN is that it allows for a unified return filing, which includes the state GST (SGST), Central GST (CGST), and Integrated GST (IGST). In that sense, GSTN has eased the process as taxpayers no longer have to file multiple returns.

4. Profile analysis of taxpayers

At the time of registration for GST, every taxpayer needs to get his details verified. And this verification is done by GSTN. Once the verification is done, the details are then sent to the Central and state government tax authorities for approval.

5. Submitting Reports

In addition to the above responsibilities and duties, GSTN also submits the MIS reports to the government.

Applying For GSTN

If you’re looking to apply to GSTN, you’d be needing a valid mobile number, PAN details of the business, and an email ID. Here the steps to register for the same.

1. Head to the official portal of GSTN

2. Look for a registration option on the portal and choose it

3. Fill in all the requested details

4. Once you enter all the details, click on proceed.

Conclusion

As India is becoming digitally inclined, more and more business is being conducted online in the country. To make tax compliance better, this online shift in business is also being promoted by the government. And at the center of all this is the GSTN. The government is utilising it as a testbed for complete digital services.

Moreover, it has been tracking financial details much less challenging, resulting in more transparency and clarity. It also provides a well-built information technology infrastructure that withstands cyberattacks. But above all, the GSTN has ensured secure transactions and helped bridge the government and taxpayers’ gap in the past few years.

Also Read:

1) What are some differences between property tax & wealth tax in India?
2) How are crypto-currencies taxed in India?
3) How to get your business listed on the Stock Exchange?
4) How does the share market work?

Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more!
Download OkCredit now & get rid of your bookkeeping hassles.
OkCredit is 100% Made in India.