GSTN: The Goods and Service Tax Network in India

All the related information shall be accessible on a single platform. Tax authorities can use it for tracking all transactions, while taxpayers can use GSTN for filing returns, tracking refunds, making compliances etc.

Features of GSTN:

National Information utility:

The GST network is considered as a trusted National Information Utility. The network provides reliable, strong, and seamless IT infrastructure and information passing.

Ownership:

It is partly owned by central government (49%) and partially by private sector banks and other institutions (51%).

Robust Infrastructure and Complex Operations

The primary role of GSTN is to assist taxpayers with registration, tax payments, and claiming GST returns, while also generating business analytics. Additionally, it manages the calculation and settlement of Integrated GST (IGST) and Input Tax Credit (ITC). GSTN aims to provide comprehensive solutions to complex taxation processes.

Information Security:

Most of the GST network is owned by the Central Government. Therefore, the responsibility for maintaining confidentiality also lies with the government. The central government also handles the composition of the board, special resolution mechanism, shareholder’s agreement, and the agreement made between the GSTN and the state government.

Payment:

GSTN allows taxpayers with the option to make payments both online and offline -

• Online: Taxpayers can pay GST through internet banking. The RBI has designated specific banks, known as agency banks, to collect GST payments. Taxpayers select an authorized bank from the list, log in to the bank's online portal, complete the payment, and download the challan for their GST payment.
• Offline: Taxpayers can also pay GST via offline methods, such as "over-the-counter" payments. By visiting the designated bank, taxpayers can make the payment directly. The bank will then notify the RBI and update the GST portal with the necessary details.

Expenses

The user charges will be fully covered by the Central and State Governments, with each contributing equally (50:50). The state's share will then be allocated to individual states based on the number of taxpayers in each state.

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Functions undertaken by GSTN:

GSTN acts as a medium for the taxpayers of the country and the Department to interact with each other. It should also be noted that GSTN will not retain any part of the amount paid as tax. It is a portal which facilitates end to end compliance in accordance with GST Tax. GSTN is also capable of handling the most complex IGST transactions. It will also provide the facility to the taxpayers for their tax payments and refunds.

The most popular functions presently undertaken on GSTN portal are-

1. Statutory Functions and
2. Non- Statutory Functions

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Simplified Structure of GSTN

The current GSTN structure has been adopted after the approval of the Finance Ministers of states and the Union Government.

• GSTN’s equity share of 51% is held by the private players and the rest of 49% is held by the government ( divided between the central and state government).
• Central government holding is much larger than the private holding, so this ensures that the government has a hold over this institution.
• Data of the taxpayer is also in safe hands of the government and misuse of the same is not possible.
• The authorized capital of GSTN is Rs.10 crores (1.6 Million US$).
• GSTN has also been approved for a non-recurring grant of Rs.315 crores.

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Goods and Service Tax Identification Number

Once a taxpayer is registered on the portal he/she is given a unique business identification number called GSTIN. It is a 15 digit number used when you file your returns. The chances of tax manipulation and evasion is reduced as it creates a transparency in transactions.

• The first two digits here are denoting the unique state code. For Example- The state code of Odisha is 21.
• The next 10 alphabets here denote the PAN card number the taxpayer holds.
• The 13th digit is of the registration number which the taxpayer has been allotted.
• The 14th digit "G” by default, it is not specifying anything.
• The 15th digit can be a number or alphabet, it is a sum check.

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GST Infrastructure

The GST network developed, GST portal works as the front end of IT ecosystem for the tax payments in India. The back ends of the systems would be CBEC and individual state tax department.

The functions of the front end desk are:

• Registration application filling.
• Return filing
• Challan creation
• IGST payment settlement
• Analysis and generation of Business.

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How to Apply for GSTIN

GSTIN is completely free of cost and is a part of GSTN registration process. After the taxpayer submits the duly filled application, the GST officer rectifies it. After the completion of the entire process the trader or the business is allotted a unique 15-digit registration id.

GSTN registration can be done through two different ways:

• In a GST Sewa Kendra
• Or, through GST portal

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GST System is Integrated with Bank Validation

The GST network advisory on April 24, 2023, stated that the bank account validation will be synced with the GST system. It will ensure that the bank account details are accurate. As per the advisory, the taxpayer is required to check the status of bank account verification on the official portal.

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