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 (GSTN) to replace the old Tax Identification Number (TIN) allotted by respective states under Value-added Tax (VAT) registration. The GSTN allows businesses to avail of tax benefits under the GST regime.
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.
The GSTN is capable of processing 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 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 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 in comparison to any individual stakeholders.
The GST Network allows payment by taxpayers through both online and offline modes:
Internet banking facility can be availed for online payment. The Reserve Bank of India (RBI) has authorized specific banks, known as the Agency banks for collecting payments made in favour of GST. The taxpayer shall make a payment by logging onto the selected agency bank’s web portal and download a challan of the GST transaction done.
GST payment through offline mode can be availed through the ‘over the counter’ option at any of the select agency banks. The agency bank shall further communicate the payment details to the RBI and the GSTN for its updation.
A major portion of 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.
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.
The Goods and Services Network designed to act as a channel of communication between the taxpayers and the governments processes a mammoth volume of invoices and taxpayer returns every month. Here are a few basic activities the GSTN performs:
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
Once the taxpayer’s profile is verified and approved, he/she is allotted a GSTIN and notifies the respective tax authorities about it.
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 could avail of the Input Tax Credit (ITC) benefits.
GSTN has a unified, hassle-free return filing method for any type of 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 the respective state government.
In addition to the above basic duties, the GSTN is involved in a few more tasks such as:
The advent of GSTN 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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