GSTN - Goods and Service Tax Network

What is GSTN: Introduction to Goods and Services Tax Network

In India, the GST was hailed as a long-awaited reform in the indirect taxes sector. Rolled out in July 2017, GST has provided enormous benefits to taxpayers. But at the same time, GST has proved to be a massive technological challenge for the government to implement. The Goods and Services Tax Network (GSTN) was created as a solution.

Every taxpayer in India is well aware of the GST regime but may not know what is GSTN. GSTN stands for Goods and Services Tax Network. It is a non-government, nonprofit body. It has been tasked with managing and maintaining the entire IT system and database for the online GST portal. The government uses this portal to provide different services (such as GST filing) to taxpayers and to track every financial transaction.

Structure of GSTN

GSTN is a public-private partnership. 49\\\\\\\% of the share capital is owned by the Indian government (divided equally between the State and Central governments), while 51\\\\\\\% is owned by private parties. Its authorized capital is Rs. 10 crore, or around US$1.6 million.

Infosys was awarded the contract to develop the GSTN portal in the year 2015. It is presently chaired by Mr. Navin Kumar, an Indian Administrative Service official, who has served the Government of Bihar and the Central Government.

Here is a detailed breakup of GSTN’s shareholding:

Shareholder                                    Shareholding (\\\\\\%)

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

Total                                                             100

Salient Features of the GSTN

Ownership

The Indian government’s stake (at 49\\\\\\\%) far exceeds that of any single private entity. It also enjoys complete strategic control through Board composition and shareholder agreements. The privacy and security of taxpayers' data are guaranteed because of this structure.

Robust and dynamic

The GSTN portal was a challenge to develop and roll out. But today, it can handle complex IGST transactions, thanks to its strong IT infrastructure. In addition, it also allows for extremely fast data exchange between the GST portal and taxpayers. The immense volume of transactions per second is also managed easily by the GSTN.

Shared Expenses

The expenses of the GSTN are apportioned between Central and State governments in a 1:1 ratio. States share expenses depending on how many taxpayers are active in the state. These expenses include not just operating expenses such as rent, salary and IT facilities but also fraud analytics, security audit, etc.

Functions of GSTN

On the one hand, GSTN provides robust support to the GST Common Portal. On the other hand, it is the uniform and singular interface between the government and the taxpayer. The entire process from GST registration to GST filing can be conducted online. To get a sense of the scale of operations, sample this – the GSTN portal has to facilitate 3 billion invoices every month and return filing for about 70 lakh taxpayers.

In a nutshell, GSTN’s functions are:

• Allowing for GST registration

• Supporting monthly invoices

• Allowing for GST filing

• Handling GST payments and refunds

For further information on GST registration and GST filing, contact our consultants at LegalDocs.