Goods and Services Tax Network will help in keeping strategic control: Prakash Kumar

By Prakash Kumar, CEO, GSTN

As is expected with any radical reform or transformation, the unrolling of the GST has also created quite a significant stir in India. There is palpable concern among taxpayers and businesses over how the new system will work out. Despite the anxiousness, taxpayers across the country have responded very positively to the new interface, with a majority of them having already completed their migration to the new portal.

THE IT BACKBONE OF GST
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 taxpayer and a common and shared IT infrastructure between the Centre and states. Integrating 36 disparate systems, which were at different levels of maturity would have been too complex. Besides GST being a destination-based tax, interstate 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 backbone which enables capture, processing and exchange of information amongst the stakeholders (including taxpayers, states and central government, accounting offices, banks and RBI). In view of the sensitivity of the information that would be available with the agency which will put in place the IT infra, the government must have strategic control over the agency. Keeping these requirements in view, Government of India and state governments created goods and services tax network (GSTN), a special purpose vehicle as non-government, not-for-profit company where Centre holds 24.5% shares and all states collectively hold 24.5%. The remaining shares are held by five private financial institutions. This structure brings flexibility of private sector with strategic control of the government.

THE PROCESS
GSTN rolled out the registration module on November 8, 2016 to on board taxpayers registeredunderVAT, service tax, central excise and other taxes to be subsumed in GST. Payment of taxes has started taking place using one challan for all types of taxes which is prepared on the GST portal. Once challan is created with GSTIN, name of taxpayer, amount under various tax heads and sub-heads etc., the taxpayer has following two options to pay the tax. He can use Net-banking facility out of 25 authorised banks or print the challan and take it to an authorised bank for payment over the counter (OTC). The OTC payment can be up to `10,000 in a month. The taxpayer can also use NEFT/RTGS from any bank operating in India. The money gets deducted from the account of the taxpayer and gets transferred to RBI though the bank. No tax money ever comes to GSTN in any manner.

REDUCING COMPLIANCE BURDEN
Tax compliance is the duty of every citizen. However, making the process of compliance simple and convenient is the responsibility of the government. At GSTN, we have crafted a series of services and technological tools to ensure that paying taxes and filing returns becomes convenient for the last common denominator. Checking of claim of input tax credit (ITC) is one of the fundamental pillars of GST, for which data of business-to -business (B2B) invoices have to be uploaded and matched. The invoice level data can be directly entered on the portal by the taxpayer. In case the number of B2B invoices is higher, he can use free offline tool developed by GSTN which imports data from Excel sheet and converts it into a json file which is then uploaded on the GST portal. GSTN has already released template of Excel sheet in which taxpayers can keep the business data at invoice level. The tool can pull 19,000 line items from Excel sheet to generate a 5 Mb file. The tool can be used multiple times to upload data for creating GSTR-1. For those taxpayers who have lakhs of invoices and they want one-stop shop for end-to-end functionality, GSTN has empaneled GST Suvidha Providers (GSPs). The GSPs are going to provide accounting services, inventory and reconciliation services and facility of direct upload into GST system.

The common GST portal created and managed by GSTN will do this matching on the basis of invoice level data filed as part of return by all taxpayers. Similar exercise will be done for interstate supplies where goods or services will move from the state of origin to the state of consumption and so will the taxes. The claim of IGST and its utilisation will be settled based on returns filed at the common GST portal. GSTN will create and maintain the information on IGST based on returns of taxpayers. This data will be used for settlement of funds between Centre and states.

USHERING IN A COMMON MARKET
The common GST portal will be the single interface for all taxpayers from any part of the country. Only in case where a taxpayer is picked up for scrutiny or audit, he will interface with the respective tax authority. For all other cases, which is expected to be around 95%, the common GST portal will be the only interface taxpayer. The way it has been conceived and devised, GST portal truly promises to make India one single, albeit large, market, that promises to bring multiple benefits for the economy.