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What is GSTN

The Goods and Services Tax Network (GSTN) is a unique and intricate IT enterprise that establishes a channel of communication and interaction between taxpayers, the central and various state governments, and other stakeholders. This single consolidated IT platform has given shape to the main objective of Goods and Services Tax (GST), i.e., One Nation, One Tax, One Market.

For compliance and administrative purposes, the GSTN has brought together millions of taxpayers who were earlier registered on different tax platforms under a consolidated umbrella. Consequently, any business entity registered on GSTN shall be allotted a 15-digit Goods and Services Tax Identification Number (GSTIN) to replace the old Tax Identification Number (TIN) allotted by respective states under Value-added Tax (VAT) registration. 

Structure of GSTN

The uniqueness of the Goods and Services Tax Network lies in its endeavor to act as a uniform interface for the taxpayers and governments along with a shared, common technology infrastructure between the central and the state governments.

  • Structurally, 51% of GSTN’s stake is held by private entities, and the government owns the remaining 49%.

  • GSTN’s authorized share capital is Rs. 10 Crores, 49% of which is equally distributed between the Central and various state governments, with the remaining 51% distributed between private banks.

  • Further, a non-recurring grant of Rs. 315 Crores was sanctioned for its sophisticated backend development by Infosys Technologies Ltd.

Shareholder

Shareholding

Central Government

24.5%

State Governments and EC

24.5%

HDFC

10%

HDFC Bank

10%

ICICI Bank

10%

NSE Strategic Investment Co

10%

LIC Housing Finance Ltd

11%

Total

100%

Features of GSTN

  • Manages Gargantuan Operations: The GSTN can process a heavy volume of complex transactions, such as adjustment of inter-state GST (IGST). This is made possible through its robust and secure IT infrastructure that facilitates a swift exchange of data between the taxpayers and the GSTN. The primary purpose of GSTN is to assist taxpayers in registering, paying taxes, and claiming GST returns in order to, among other things, produce business analytics. Additionally, the network is in charge of computing and paying the Integrated GST (IGST) and the Input Tax Credit (ITC). Thus, the GST network concentrates on offering comprehensive answers to complex and exhaustive taxing problems.

  • Reliable National Information Utility (NIU): The GSTN is tagged as the most reliable NIU, making it in charge of providing a secure and strong IT infrastructure that enables a verifiable information exchange. The GST Network serves as a reliable national information service (NIU). This basically means that the network is responsible for delivering dependable, strong, seamless information passing, and IT infrastructure.

  • Ownership: The ownership of GSTN is distributed between the government (49%) and private entities (51%) that comprise banks and financial institutions. However, a major share of the GSTN is owned by the Central government compared to any individual stakeholder.

  • Payment Mode: The GST Network allows payment by taxpayers through both online and offline modes:

  1. Online Mode: Internet banking facilities can be availed for online payment. The Reserve Bank of India (RBI) has authorized specific banks, known as the Agency banks, to collect payments made in favor of GST. The taxpayer shall make a payment by logging onto the selected agency bank’s web portal and downloading a challan of the GST transaction done. Once the choice is made, the taxpayer must log in to the online banking platform of the chosen bank to proceed with the transaction and download the GST payment challan.

  2. Offline Mode: GST payment online can be availed through the ‘over the counter option at any select agency bank. The agency bank shall further communicate the payment details to the RBI and the GSTN for its updation. To pay the GST, you can go directly to the relevant bank. The bank will also update all pertinent information by notifying the RBI and the GST portal.

  • Information Security: A major portion of the responsibility to preserve the security and confidentiality of GSTN data lies with the central government. It shall manage the board’s composition, shareholder’s agreement, resolution mechanisms, and any agreements forged between the state governments and the network. 

  • Financial Maintenance: The expenses incurred towards utility, infrastructure maintenance, and any other operations of the GSTN shall be paid in equal share by the central and state governments. Each state’s share of expenses shall be calculated in proportion to the number of taxpayers in the state.

Functions of GST Network

The Goods and Services Network, designed to act as a communication channel between the taxpayers and the governments, processes a mammoth volume of invoices and taxpayer returns every month. The GST Network serves as essentially the front end of the IT ecosystem for taxpayers. More than 2 billion invoices are processed by GSTN each month, in addition to processing returns for more than 65 Lakh taxpayers and expanding. The GST network is in charge of a number of significant tasks, including the following:

  • Analysis of Taxpayer’s Profile: When a taxpayer wants to register on GSTN, all his/her details are thoroughly verified and passed on to the central and the respective state government for approval.

  • Registration: Once the Taxpayer’s profile is verified and approved, he/she is allotted a GSTIN and notifies the respective tax authorities about it. As was already established, the GST network serves as a bridge between the government and the taxpayer seeking to register for GST under the new tax regulations. Once the registration has been confirmed, GSTN issues the GST Identification Number to the appropriate taxpayer and uploads the information with the appropriate tax authorities.

  • Tallying Invoice: This is a key function performed by the GSTN to cull out any discrepancies between the purchase invoices and sales invoices and resolve them so that the Taxpayer can avail of the Input Tax Credit (ITC) benefits. In order for taxpayers to benefit from Input Tax Credit, the GST network essentially compares the purchase and sale invoice totals to look for any discrepancies and correct them.

  • Filing Returns: GSTN has a unified, hassle-free return filing method for any GST, be it State GST (SGST), IGST, or Central GST (CGST), without burdening the Taxpayer. Once filed, the GSTN processes and forwards the returns to the central government and state governments. In addition to the above basic duties, the GSTN is involved in a few more tasks such as:

How to Apply for GSTIN

You can follow the steps below to apply for GSTIN via the GST portal:

  • Step 1: Navigate to the online portal of GST.

  • Step 2: Click on the ‘New Registration’ button.

  • Step 3: Fill in all the essential details such as name, phone number, and email address.

  • Step 4: Verify your mobile number and email by entering the OTP.

  • Step 5: Once done, you will receive an Application Reference Number (ARN)

  • Step 6: Using the ARN, log in to your application form and enter additional details.

  • Step 7: Upload the essential documents.

  • Step 8: Submit your application using Aadhaar OTP or DSC.

However, you can also apply for GSTIN offline from GST Seva Kendra if you are not much comfortable with online procedures.

Calculation and Adjustment of IGST

Collating Agency banks with tax payment data

Maintenance of Input Tax Credit Calculator

Generating and sending MIS (Management Information and System) reports to the governments

The advent of the GST Network has undoubtedly simplified the complex indirect taxation system by consolidating and replacing all indirect taxes under a single roof. GSTN’s superior IT interface has also eased the burden on business entities by providing a quick, one-stop solution to upload their invoices, file returns, and avail tax benefits.

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Taxpayer Profile Analysis

When a taxpayer applies to register for GST, all of their specific information is checked before being submitted for approval to the tax authorities of the federal and state governments. In addition to managing the basic tax filings and tax returns, GSTN also has the following additional duties related to managing taxation:

  • Calculation, followed by settlement of integrated GST (or IGST)

  • Integration of banking network to tax payment details

  • Management of Input Tax Credit computation engine 

  • Submission of the MIS reports to the government 

Latest GSTN News

January 11, 2023

The GSTN has now enabled the latest functionality LUT or Letter of Undertaking for the financial year 2023-2024 

January 13, 2023

Authorities have now implemented the new Automated Drop Proceedings functionality on the GST official Portal.

The department has informed the GST stakeholders in detail about the new functionalities. The functionalities for December 2022 address issues like registration, returns, and refund claims.

Latest GSTN News

GSTN introduces new features to the GST Portal

The GSTN has released module-by-module new functionalities for taxpayers to use on the GST portal. Various new functionalities for GST stakeholders are introduced on the GST portal from time to time. These features apply to a variety of modules, including Registration, Returns, Advance Ruling, Payment, Refund, and other topics. Various webinars, as well as informational videos on these functionalities, are held for the benefit of stakeholders and posted on GSTN's dedicated YouTube channel.

From October to December 2020, the GSTN has allowed deposit of fees under the CGST or IGST heads for filing an Advance Ruling application or an appeal. The GSTN has also allowed “Displaying Annual Aggregate Turnover” to taxpayers on their dashboard and “View of Annual Aggregate Turnover of a Taxpayer” on the GST portal.

- May 05, 2021

FAQS on GSTN

✔️What is the meaning of GSTIN?

GSTIN, or Goods and Services Tax Identification Number, is a unique 15-digit number that is assigned to every taxpayer registered under GST. The first 2 digit represents the state code, and the next 10 digit is the PAN number of the business. The 13th digit reflects the number of registrations under that PAN, the 14th digit is the alphabet ‘Z’, and the last digit is a check code.

✔️What is the function of GSTN?

The functions of GSTN are as follows:

  • Serves as a platform between the government and a taxpayer who wants to file GST under the new laws.

  • Acts as a common platform for filing SGST, CGST, and IGST and processes and forwards the returns to the respective tax authorities. 

  • Fixes any mismatch between the purchase and the sales invoices so taxpayers can enjoy the benefits of Input Tax Credit.

✔️What are the benefits of obtaining GSTIN?

GSTIN can bestow taxpayers with several remarkable benefits, such as:

  • Provides legal recognition to your business, in turn, attracting more customers.

  • Aids you in enjoying input credit on the input services and own purchases.

  • Gives you the scope to expand your business on e-commerce sites.

  • Ensures the availability of input credit on purchasing products from small businesses. 

  • Allows interstate sales of goods, increasing your reach to probable customers. 

  • Helps your business to get a good GST rating by ensuring that you strictly abide by all the rules of GST.

✔️What is the role of GSTN in return filing?

GSTN serves as a common platform which can process and forward the return to both state and central tax authorities. Additionally, you can file all types of GST via this platform, such as CGST, SGST and IGST. This has led to the elimination of the need to use different platforms.

✔️How do I find my GSTN number?

The legal name or trade name of the registered person can be used to locate the GST number. You may also use your PAN to find your GST number. 

 

✔️Who is the owner of GSTN?

Currently, the Central Government and the State Government each retain 24.5% of the equity shares while non-governmental entities hold the remaining 51%. Through a number of procedures, GSTN is strategically controlled by the Government.

 

✔️Why is GSTN needed?

Businesses must register for the Goods and Services Tax (GST) and get a special 15-digit Goods and Services Tax Identification Number (GSTIN). Any business that has a turnover of ₹40 Lakhs is required to register for GST, according to the Goods and Services Tax Act of 2017.

 

✔️Is GSTN and the GST portal the same?

Yes. The GSTN is an online portal used by the Indian government to monitor all financial transactions. All GST-related services are tracked including registration, tax filing, and maintaining all tax information.