Q 1. 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.
Q 2. What is the genesis of GSTN?
Ans. 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 it 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 Government 24.5%
State Governments 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.
Q 3. 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.
Q 4. 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, 250 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.
Q 5. 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.
Q 6. 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.
Q 7. 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.
Q 8. 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.
Q 9. 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.
Q 10. 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.
Q 11. 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.
Q 12. 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.
Q 13. 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.
Q 14. 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.
Q 15. 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.
Q 16. 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.
Q 17. 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.
Q 18. 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.
Q 19. 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.
Q 20. 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.
Q 21. 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.
Q 22. 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.
Q 23. 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.