GST FAQs

What is GSTN?

Ans. Goods and Services Tax Network (GSTN) is a nonprofit

non-government company, which will provide

shared IT infrastructure and service to both central

and state governments including tax payers and other

stakeholders. The Frontend services of registration,

Returns and payments to all taxpayers will be provided by

GSTN. It will be the interface between the government and the taxpayers.

What is the genesis of GSTN?

The GST System Project is a unique and complex

IT initiative. It is unique as it seeks, for the first time to

establish a uniform interface for the tax payer and a

common and shared IT infrastructure between the Centre

and States. Currently, the Centre and State indirect tax

administrations work under different laws, regulations,

procedures and formats and consequently the IT systems

work as independent sites. Integrating them for GST

implementation would be complex since it would involve

integrating the entire indirect tax ecosystem so as to

bring all the tax administrations (Centre, State and Union

Territories) to the same level of IT maturity with uniform

formats and interfaces for taxpayers and other external

stakeholders. Besides, GST being a destination based tax,

the inter- state trade of goods and services (IGST) would

need a robust settlement mechanism amongst the States

and the Centre. This is possible only when there is a strong

IT Infrastructure and Service back bone which enables

capture, processing and exchange of information amongst

the stakeholders (including taxpayers, States and Central

Government, Bank and RBI)

 

This aspect was discussed in the 4th meeting of 2010

of the Empowered Committee of State Finance Ministers

held on 21/7/2010. In the said meeting the EC approved

creation of an ‘Empowered Group on IT Infrastructure

for GST’ (referred as EG) under the chairmanship of

Dr. Nandan Nilekani along with Additional Secretary

(Rev), Member (B&C) CBEC, DG (Systems), CBEC, FA

Ministry of Finance, Member Secretary EC and five state

commissioners of Trade Taxes (Maharashtra, Assam,

Karnataka, West Bengal and Gujarat). The Group was

mandated to suggest, inter alia, the modalities for

setting up a National Information Utility (NIU/ SPV)

for implementing the Common Portal to be called GST

Network (GSTN) and recommend the structure and terms

of reference for the NIU/ SPV, detailed implementation

strategy and the road map for its creation in addition to

other items like training, outreach etc.

In March 2010, TAGUP constituted by the Ministry of

Finance had recommended that National Information

Utilities should be set up as private companies with a

public purpose for implementation of large and complex

Government IT projects including GST. Mandate of TAGUP

was to examine the technological and systemic issues

relating to the various IT projects such as GST, TIN, NPS,

etc.

 

The EG had seven meetings between 2nd August 2010

and 8th August 2011 to discuss the modalities. After due

deliberations, the EG recommended creation of a Special

Purpose Vehicle for implementing the GST System Project.

To enable efficient and reliable provision of services in a

demanding environment, the EG recommended a non-

Government structure for the GSTN SPV with Government

equity of 49% (Centre – 24.5% and States – 24.5%) after

considering key parameters such as independence of

management, strategic control of Government, flexibility

in organizational structure, agility in decision making and

ability to hire and retain competent human resources.

 

In view of the sensitivity of the role of GSTN and the

information that would be available with it, the EG also

considered the issue of strategic control of Government

over GSTN. The Group recommended that strategic control

of the Government over the SPV should be ensured through

measures such as composition of the Board, mechanisms of

Special Resolution and Shareholders Agreement, induction

of Government officers on deputation, and agreements

between GSTN SPV and Governments. Also, the shareholding

pattern would ensure that the Centre individually and

States collectively are the largest stakeholders at 24.5%

each. In combination, the Government shareholding at 49%

would far exceed that of any single private institution.

 

EG also brought out the need to have technology

specification to run this company so that there is 100 percent

matching of returns. The business knowledge resides with

the officials of Government of India and States. However,

professionals with sophisticated technology knowledge will

be required to run this company independently, similar to

NSDL which is working professionally and independently.

EG also recommended a non-government company as that

will have operational freedom.

These recommendations were presented before the

Empowered Committee of State Finance Ministers in its

3rd meeting of 2011 held on 19th August 2011 and in the

4th meeting of 2011 of the EC held on 14th Oct 2011. The

proposal of the EG on IT infrastructure for GST regarding

GSTN and formation of a non-profit section 25 company

with the strategic control with the Government were

approved by the Empowered Committee of State Finance

Ministers (EC) in its meeting held on14.10.11.

 

The note of Department of Revenue for setting up a Special

Purpose Vehicle to be called Goods and Services Tax

Network on the lines mentioned above was considered by

the Union Cabinet on 12th April 2012 and approved. The

Union cabinet also approved the following:

i. Suitable and willing non-government institutions

will be identified and firmed up by the Ministry

of Finance to invest in GSTN-SPV prior to its

incorporation.

ii. The strategic control of the Government over

the SPV would be ensured through measures

such as composition of the Board, mechanisms

of Special Resolution and Shareholders

Agreement, induction of Government officers on

deputation, and agreements between GSTN SPV

and Governments.

iii. The Board of Directors of GSTN SPV would

comprise 14 Directors with 3 Directors from

the Centre, 3 from the States, a Chairman of the

Board of Directors appointed through a joint

approval mechanism of Centre and States, 3

Directors from private equity stake holders, 3

independent Directors who would be persons of

eminence and a CEO of the GSTN SPV selected

through an open selection process.

iv. Relaxation in relevant rules to enable deputation

of Government officers to the GSTN SPV for

exercise of strategic control and for bringing in

necessary domain expertise.

v. GSTN SPV would have a self- sustaining revenue

model, where it would be able to levy user

charges on the tax payers and the tax authorities

availing services.

vi. GSTN SPV to be the exclusive national agency

responsible for delivering integrated indirect

Tax related services involving multiple tax

authorities. Accordingly, any other service

provider seeking to deliver similar integrated

services would be required to enter into a formal

arrangement with GSTN SPV for the services.

vii. A one- time non- recurring Grant- in aid of Rs.

315 crore from the Central Government towards

expenditure for the initial setting up and

functioning of the SPV for a three year period

after incorporation.

 

In compliance of the Cabinet decision, GST Network was

registered as a not-for-profit, private limited company

under section 25 of the Companies Act, 1956 with the

following equity structure:

Central Govt                                  24.5%

State Govts                                    24.5%

HDFC                                               10%

HDFC Bank                                       10%

ICICI Bank                                       10%

NSE Strategic Investment Co             10%

LIC Housing Finance Ltd                     11%

 

The GSTN in its current form was created after taking

after approval of Empowered Committee of State Finance

Ministers and Union Government after due deliberations

over a long period of time.

What services will be rendered by GSTN?

Ans. GSTN will render the following services through the

Common GST Portal:

(a) Registration (including existing taxpayer master

migration and issue of PAN based registration number);

(b) Payment management including payment

gateways and integration with banking systems;

(c) Return filing and processing;

(d) Taxpayer management, including account

management, notifications, information, and

status tracking;

(e) Tax authority account and ledger Management;

(f) Computation of settlement (including IGST

settlement) between the Centre and States;

Clearing house for IGST;

(g) Processing and reconciliation of GST on import

and integration with EDI systems of Customs;

(h) MIS including need based information and business intelligence;

(i) Maintenance of interfaces between the Common

GST Portal and tax administration systems;

(j) Provide training to stakeholders;

(k) Provide Analytics and Business Intelligence to tax authorities; and

(l) Carry out research, study best practices and provide training to the stakeholders.

What is the interface system between GSTN and the states/CBEC?

Ans. In GST regime, while taxpayer facing core services

of applying for registration, uploading of invoices, filing of

return, making tax payments shall be hosted by GST System,

all the statutory functions (such as approval of registration,

assessment of return, conducting investigation and audit

etc.) shall be conducted by the tax authorities of States and Central governments.

 

Thus, the frontend shall be provided by GSTN and the

backend modules shall be developed by states and Central

Government themselves. However 24 states (termed as Model

2 states) have asked GSTN to develop their backend modules

also. The CBEC and rest of the states (Model 1) have decided

to develop and host the back-end modules themselves.

What will be the role of GSTN in registration?

Ans. The application for Registration will be made Online on GST Portal.

Some of the key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable) will be validated online against respective agency i.e. CBDT, UID, MCA etc, thereby ensuring minimum documentation.

The application data, supporting scanned documents shall be sent by GSTN to states/ Centre which in turn shall send the query, if any, approval or rejection intimation and digitally signed registration to GSTN for eventual download by the taxpayer.

What is the role of Infosys in GSTN?

Ans. GSTN has engaged M/S Infosys as a single Managed

Service Provider (MSP) for the design, development,

deployment of GST system, including all application

software, tools and Infrastructure and operate & maintain

the same for a period of 5 years from Go-Live.

What are the basic features of GST common portal?

Ans. The GST portal shall be accessible over Internet (by Taxpayers and their CAs/Tax Advocates etc.) and Intranet by Tax Officials etc. The portal shall be one single common portal for all GST related services e.g.–

i. Tax payer registration (New, surrender, cancelation, etc.);

ii. Invoices upload, auto-drafting of Purchase register of buyer Periodic GST Returns filing;

iii. Tax payment including integration with agency banks;

iv. ITC and Cash Ledger and Liability Register;

v. MIS reporting for tax payers, tax officials and other stakeholders;

vi. BI/Analytics for Tax officials.

What is the concept of GST Eco-system?

Ans. A common GST system will provide linkage to all State/UT Commercial Tax departments, Central Tax authorities, Taxpayers, Banks and other stakeholders.The eco-system consists of all stakeholders starting from taxpayer to tax professional to tax officials to GST portal to Banks to accounting authorities. The diagram given below depicts the whole GST eco-system.

What is GSP (GST Suvidha Provider)?

Ans. The GST System is being developed by Infosys, the Managed Service Provider (MSP). The work consists of development of GST Core System, provisioning of required IT infrastructure to host the GST System and running and operating the system for five years.

The proposed GST envisages all filings by taxpayers electronically. To achieve this, the taxpayer will need tools for uploading invoice information, matching of input tax credit (ITC) claims, creation of party-wise ledgers, uploading of returns, payment of taxes, signing of such document with digital signature etc.

The GST System will have a G2B portal for taxpayers to access the GST Systems, however, that would not be the only way for interacting with the GST system as the taxpayer via his choice of third party applications, which will provide all user interfaces and convenience via desktop, mobile, other interfaces, will be able to interact with the GST system. The third party applications will connect with GST system via secure GST system APIs. All such applications are expected to be developed by third party service providers who have been given a generic name, GST Suvidha Provider or GSP.

Taxpayers will interface with GST System via GST system portal or via GSP ecosystem provided by way of applications for activities such as Registration, Tax payments, Returns filing and other information exchange with GST core system. The GSPs will become the user agencies of the GST system APIs and build applications and web portals as alternate interface for the taxpayers.

What will be the role of GST Suvidha Providers?

Ans. The GSP developed Apps will connect with the GST system via secure GST system APIs. Some of the functions of GSP are:

• Development of various apps / interfaces for taxpayer, TRPs of GST system

• Providing other value added services to the taxpayers

The GST Suvidha Providers (GSPs) are envisaged to provide innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST Systems from registration of entity to uploading of invoice details to filing of returns. Thus there will be two sets of interactions, one between the App user and the GSP and the second between the GSP and the GST System.

What are the benefits to taxpayers in using the GSPs?

Ans. A GSP providing tax accounting software will have the advantage of already providing the tax payer with a vast majority of the taxation functionality. It will help the tax payer if the delta process of upload of the invoice/ return and reconciliation of the same is also provided by the GSP. Whereas in case of GST portal, another set of exercise manually or otherwise will have to be done to upload the invoice data or the return. The interface and features exposed by GST portal will be uniform for all taxpayers and might be basic in form and design. On the other hand GSPs are expected to have richer interfaces and features required by specific group (large taxpayers with completely automated financial system,SME with semi-automated system and small size with no system) of taxpayers. Also, by sheer size the GST portal will not be as nimble as that provided by a GSP.

GSPs can come up with application to provide GST filing facility in existing software or develop end-to-end solution for SME and small taxpayer to manage their sale/purchase and GST filing e.g. an offline utility like spread sheet, which taxpayer can fill their invoice details and then upload on GST portal for processing. Similarly, for Tax Consultants (TC), GSPs can provide dashboard to display list of his/her all clients and clicking on a particular client can give TC the snapshot of the actions/ pending actions by client.

GSPs can provide innovative/value added features, which would distinguish them with other GSPs in the market.

Source: http://www.gstn.org/ecosystem/faq_question.php

What will be the role of taxpayers w.r.t GST Common Portal being developed and maintained by GSTN?

Ans. Some of the functions which will be performed by taxpayers through GSTN are:

• Application for registration as taxpayer, and profile management;

• Payment of taxes, including penalties and interest;

• Uploading of Invoice data & filing returns / annual statements;

• Status review of return/tax ledger/cash ledger.

What will be the role of tax officers from State and Central Govt in respect of the GST system being developed by GSTN?

Ans. The officers will be required to use GSTN information at the backend for following functions:

• Approval/rejection for enrollment/registration of taxpayers;

• Tax administration of state tax(Assessment /Audit /Refund / Appeal/ Investigation);

• MIS and other functions.

Will GSTN generate a unique identification for each invoice line in GSTN system?

Ans. No, GSTN will not generate any new identification.

The combination of Supplier’s GSTIN, Invoice no and

Financial year with HSN/SAC Code will make each line unique.

Can invoice data be uploaded on day to day basis?

Ans. Yes, GST Portal will have functionality to take invoice

data on any time basis. Earlier one uploads better it is as

it will get reflected to the receiver who can see the same in

his/her purchase register.

Will GSTN provide tools for uploading invoice data on GST portal?

Ans. Yes, GSTN will provide spreadsheet (like Microsoft

Excel) like tools free of cost to taxpayers to enable them

to compile invoice data in the same and upload invoice

data in one go. This will be an offline tool which can

be used to inputs invoice data without being online and

then upload the invoice data in one go for few hundred invoices.

Will GSTN be providing mobile based Apps to view ledgers and other accounts?

Ans. Yes, the GST portal is being designed in such a way

that it can be seen on any smart phone. Thus ledgers like

cash ledger, liability ledger, ITC ledger etc. can be seen on a mobile phone.

Will GSTN provide separate user ID and password for Tax Professional to enable them to work on behalf of their customers (Taxpayers) without requiring user ID and password of taxpayers, as happens today?

Ans. Yes, GSTN will be providing separate user ID and

Password to Tax Professional to enable them to work on

behalf of their clients without asking for their user ID and

passwords. The tax professional will be able to do all the

work on behalf of taxpayers as allowed under GST Law

except final submission, which will be done by the taxpayers

using e-sign (OTP) or Digital Signature Certificate.

Will tax payer be able to change the tax professional once chosen in above mentioned facility?

Ans. Yes, a taxpayer may choose a different tax professional by simply unselecting it at GSTN portal and delegating to a new tax professional.

Will existing taxpayers under Central Excise or Service Tax or State VAT have to apply for fresh registration under GST?

Ans. No, the existing taxpayers whose PAN have been

validated from CBDT database will not be required to

apply afresh. They will be issued provisional GSTIN by GST

portal, which will be valid for six months for providing

relevant data as per GST registration form. On completion

of data filing provisional registration will get converted

into regular Registration. Further notification giving

timelines will be issued by respective tax authorities.

Will GSTN put training videos on various aspects of working on GST portal for the benefit of taxpayers?

Ans. Yes, GSTN is preparing Computer Based Training

materials which have videos embedded into them for each

process to be performed on the GST portal. These will be

put on the GST portal as well as on the website of all tax authorities.

Will the return and registration data furnished by the taxpayers on the GST Common Portal will remain Confidential?

Ans. Yes, all steps are being taken by GSTN to ensure

the confidentiality of personal and business information

furnished by the taxpayers on GST Common Portal. This

will be done by ensuring Role Based Access Control (RBAC)

and encryption of critical data of taxpayers both during

transit and in storage. Only the authorized tax authorities

will be able to see and read the data.

What are the security measures being taken by GSTN to ensure security of the GST system?

Ans. GST Systems project has incorporated state of art

security framework for data and service security. Besides

high end firewalls, intrusion detection, data encryption

at rest as well as in motion, complete audit trail, tamper

proofing using consistent hashing algorithms, OS and host

hardening etc., GSTN is also establishing a primary and

secondary Security Operations Command & Control center,

which will proactively monitor and protect malicious

attack in real time. GSTN is also ensuring secure coding

practices through continuous scanning of source code to

protect against commonly known and unknown threats.

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