Understanding the GST System In India

Goods and Services Tax came into effect from 1st July 2017 in India. It replaced multiple existing indirect taxes which were previously levied by the Central and State government in the country. Under this article, you will come to know about the existing GST system in India-

Who is a GST Practitioner?

A GST Practitioner is a registered person, who is authorized/ have been approved by the GSTP to furnish information, on his behalf, to the government.

GSTN will be provided a separate user ID and password to GSTP to enable him to work on behalf of his clients without asking for their user ID and passwords.

They can do all the work on behalf of taxpayers as allowed under GST Law.
A taxpayer may choose a different GSTP by simply unselecting the previous one and then choosing new GSTP on the GST Portal.

What is the role of CBIC?

Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of policy formulation concerning levy and collection of Customs & Central Excise duties and Service Tax, prevention of smuggling and administration of matters relating to Customs, Central Excise, Service Tax, and Narcotics to the extent under CBEC’s purview. CBIC is playing an active role in the drafting of GST law and procedures, particularly the CGST and IGST law, which will be the exclusive domain of the Centre. Apart this, the CBIC has successfully prepared itself for meeting the implementation challenges, which are quite formidable.
CBIC would be responsible for the administration of the CGST and IGST law. In addition, CBIC continues to administer the excise duty regime for collection and levy of central excise duty on 5 specified petroleum products and tobacco products.

What is the role of GST Suvidha Providers(GSP)?

GSP is a person who provides the facility for GST compliance online. There are a number of GSP which are providing GST compliance services to the taxpayers. We can say that GSPs acts as a bridge between the GST Network and Application Service Providers. Although any data cannot be read or modified by GSPs. However, to do help taxpayers in their filing, GSps can use the APIs given by the Goods & Services Network to manage enhanced systems.

It is to be noted that whether a taxpayer goes for direct access to G2B portal or chooses the more comfortable option of using GSP services, a provision is made under GST for the taxpayer to take complete control, privacy, and security while interacting with the GST system.

What is the role of banks under GST system?

Banks play a vital role in the whole process of GST collection and maintenance. The branch of remitter bank is required to ensure that the correct CPIN is entered in the NEFT / RTGS message and also inform UTR to the taxpayer and Transfer the amount indicated in the NEFT / RTGS message to RBI. Banks also provide the facility of paying GST through NEFT, challan, and includes a function like-

a) Accepting the payment through the customized GST software/screen in its system only.

b) Provide an acknowledgment to the taxpayer

c) Send the instrument (if pertaining to another bank) to the clearinghouse for realization and record the result in the IT system as and when the response is received.

d) Credit the realized amount into either GST pool account, if so, maintained by the authorized bank (in its e-FPB) and after that transfer such amount into the individual tax head accounts as shown in the challan or to directly credit the amount to the respective government’s account.

What is RBI’s role in Goods and Service Tax regime?

The taxpayer accesses the GST portal and generates e-challan. The GST portal gives a unique number that is known as Common Portal Identification Number (CPIN). The taxpayer can effect payment through internet banking/debit/credit cards/NEFT/RTGS or download print the challan in case off Over the Counter (OTC) payment. After receipt of payment, A Challan Identification Number (CIN) is generated by the respective banks which will be shared with taxpayer and GST portal. It is to be noted that the funds are settled by agency banks with RBI along with the transaction (Challan) details. RBI also accept tax payment directly through NEFT/RTGS.

What is the GST Council?

Goods and services tax Council empower the president of India to constitute a joint forum of the center and States namely goods and services tax Council. Provisions relating to GST Council came into effect on 12th September 2016. The president constituted the GST council on 15 December September 2016. GST Council is allowed to make recommendations to Union and the states on matters like-

I. The taxes cesses and surcharges levied by the union, the states and the local bodies which may be subsumed in the goods and services tax.

II. The goods and services that may be subjected to or exempted from the goods and services tax.

III. The goods and services tax Council shall determine the procedure in the performance of its functions.

What is GSTN?

Goods and Services Tax Network (GSTN) has been introduced by the Government as a private company. It will provide three front-end services to the all taxpayers which are- registration, payment and return. In addition to these services to the taxpayers, GSTN has developed back-end IT modules for some States who have opted for the same. GSTN selected 73 IT, ITeS and financial technology companies and 1 Commissioner of Commercial Taxes who are known as GST Suvidha Providers (GSPs). GSPs have developed applications to be used by all GST taxpayers for interacting with the GSTN.

The design of GST systems has given role-based access. Through this taxpayers can access their own data through identified applications such as registration, return, view ledger etc. Tax official having jurisdiction can access the data as per GST law. No other entity can access the data available with GSTN, a sit can be only accessed by audit authorities as per law.

What is the Role of Account General under GST System?

The following functions will be performed by the Accountant General of State:

a) Every Account General will receive daily and monthly Put Through Statements from CAS, RBI.

b) They will also receive verified Datewise Monthly Statement (DMS) from e-PAOs and e-treasuries of the State respectively.

c) The reconciliation of both types of data will be carried out by Account General.

What is the Role of Helpdesk under the GST system?

A helpdesk under GST has been introduced by the government to help all the taxpayers who have any kind of query. Basically, if a taxpayer is facing any issue related to GST system they can directly come to the GST helpdesk and get required help and suggestions from here. E.g- If you are stuck at any step while filing your GST returns or applying for refunds etc, Helpdesk is the safest and easiest option to get the solution from.

Who is a Taxpayer under GST System?

Every person having a turnover above Rs.20 Lakhs is required to self register under GST. All the person registered under GST are required to –

  • -Self-register
  • -Upload details
  • -File returns and make the online payment
  • -Apply for refund etc
GST System in India
CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.