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HomeTaxationGSTImportance and Functions of GST Network in India

Importance and Functions of GST Network in India

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After introducing Goods and Service Tax or GST, India’s whole taxation system has got a new tax structure. After that, GSTN came into existence, intending to help implement GST services by providing a seamless IT infrastructure. GSTN stands for Goods and Service Tax Network. It is a non-profit and non-governmental organisation that manages the entire GST portal by delivering IT services. It is a platform to connect the taxpayers and the Government. 

The platform helps develop communication among taxpayers and central and state governments. The GST network provides significant services like facilitating registration, submitting tax returns, integrating banking networks and tax payments, and many other such services.

Did you know?

The Government gave the responsibility to Infosys to develop GSTN in 2015.

Structure of GSTN

The GST Network is a unique platform that acts as a uniform interface between taxpayers and the Government. Its structure is formed by the share of both Government and private players. The Government owns 49%, and private persons like businesses or investors own 51% of the total authorised capital of GSTN. The total authorised capital of the GST network is ₹ 10 crore.

Also read: GST Council Meet Highlights, Full List of Items to get Costlier

The administration of GSTN is with the Government. There will be a total of 14 members on the GSTN board, and 7 of them are from the Central and State government. Three members are private, and the remaining will be independent members. The board will appoint a CEO who will be responsible for the function of GSTN.

The structure of GST network has been mentioned below:

Central Government

24.5%

State Governement 

24.5%

HDFC

10%

ICICI Bank 

10%

NSE Strategic Invstment Company

10%

LIC Housing Finance Limited

11%

Functions of GST Network

The GST Network plays the primary role of a platform that provides IT services to the Government and taxpayers. Its modern IT infrastructure helps perform essential activities associated with GST without hassle. 

Some essential functions performed by GSTN have been stated below:

  • Filing of Return

GSTN offers a unified system of filing returns for all types of GST, including SGST, CGST, and IGST. GSTN files a tax return and forwards it to the Government, and it delivers the return to both the Central and State governments. As a result, it has made filing hassle-free.

  • Registration

GSTN provides registration services by issuing GST Identification numbers to the taxpayers. After registration verification, the platform also files the details to send them to the authorities.

  • To Match Invoice

GST Network matches the purchase invoice with the sale invoice to avoid errors. After uploading the B2B invoices, the GST portal will check the invoice with the respective suppliers. The error-free matching of invoices allows taxpayers access to the benefits of the Input Tax Credit.

  • Analyse the Profile of Taxpayers

Before registering with GST, it is necessary to verify the details of the taxpayers. Taxpayers must submit all the necessary details while applying for registration. After completing the verification, details are forwarded for the approval of the Central and State Tax authorities. 

  • Calculation of Integrated GST

Another essential function of GSTN is to calculate the integrated GST. IGST is levied in case of an interstate supply of goods and services. The revenue collected is equally divided between the Central and State government.

  • Integration of Banking Network with Tax Payment Information

GSTN poses as the transaction medium between the banks and the taxpayers. GSTN integrates the details of taxpayers after the payment of taxes. RBI and GSTN prepare the protocol to integrate the IT system of banks

  • New Additional Functionalities of GSTN

GSTN has added some new additional functionalities from time to time. These features and functionalities apply to various activities, including return, payment, refund, and many other topics. 

Also read: Impact of GST Rate on Steel and Iron in India

Salient Features of GSTN

There are many significant features of the GST network. These are:

  • Divided Ownership

Both the government and private financial institutions own the GST network. But the Government has 49% ownership, and the private persons have 51% ownership

  • Provide IT Infrastructure to Operate GST

GSTN offers an easy solution to using the whole indirect taxation system effectively. GSTN provides robust IT infrastructure for smoothly operating different activities associated with filing GST. The network helps to calculate Integrated GST and Input Tax Credit.

  • Payment Methods

Under the GSTN procedures, taxpayers can make the payment of GST through both online and offline methods. Taxpayers can make the payment online by selecting a certain one of the banks authorised by RBI to collect tax.

Taxpayers can also make payments by offline mode by visiting the specified bank directly. Later the bank will notify the RBI and GST portals to update the details.

  • Provides Information

The network is responsible for providing for a reliable infrastructure for receiving and maintaining of information like filing of return, creation of challan, settlement if IGST payment etc.  

  • Security of GSTN

Since GSTN has to maintain all the necessary and confidential details of taxpayers, it is essential to provide security to that information. The Central Government takes responsibility for protecting the GST network.

  • Shared Costs

Both the Central and State government manage the expenses related to the GSTIN by sharing all the costs that are associated with various function of GSTN.

Objectives of GSTN

  • To provide a common platform through a portal to file returns and process payments for all the states.
  • To connect taxpayers, Government, and stakeholders through a single platform, ie, the GST portal.
  • To create an effective GST eco-system
  • To provide security and confidentiality to the taxpayers
  • To help the tax authorities to develop a transparent tax system
  • To offer a similar registration process for all types of GST
  • To give the insight of the taxpayers to the specified authorities
  • To provide efficient services based on IT infrastructure for the smooth payment of taxes
  • To develop taxpayer profile utility

Importance of GST Portal

GST portal is the platform that provides a space to the taxpayer to conduct all the tax-based activities. Activities include giving the opportunity to apply for the registration, payment of taxes and settlement of dues.

The GST portal is the backbone of the whole GST system. Taxpayers have to log in to the GST portal to register. GSTN manages the GST portal and makes it accessible to taxpayers. 

There are many services available on the GST portal in India. Services are:

  • Provides access to the application for registration
  • Filing GST return
  • Refund of excess GST paid
  • Create challan after payment of GST
  • Provides transition form
  • Furnish letter of undertaking
  • Allows for composition scheme
  • E-ledgers including e-cash ledger, e-liability ledger, and e-credit ledger
  • To opt for a composition scheme
  • Allows viewing registration applications, input tax credit claims, etc
  • Allows different taxpayers to register on the same portal 

Purpose of the GST Portal

GST portal is the platform that offers the taxpayers to perform various tax-based activities. Since all the GST activities are performed on the single platform, the portal has become common for all making it one common GST portal.

The single GST portal serves the following purposes.

  • Help to manage the payment process.
  • Make the filing of returns easy.
  • Easy and efficient invoice matching for all types of taxpayers
  • Helps to track the status of the registration application
  • Enables to upload the details of invoices through the common portal

How to Login to GST Portal for New Registration?

To login to the GST portal, you will have to follow some simple steps which have been mentioned below:

  • In the first step, you will have to visit the website www.gst.gov.in to access the GST portal.
  • Next, you will have to select new registration.
  • The third step requires you to submit all the documents after filling up the details in the GST registration process.
  • After completing the GST Registration process, you will receive an ARN number. You can log in to the GST portal by using this number.

At this stage, you can view the application filled up by you. But you cannot avail any other services of the GST portal.

After the approval of the application, you will get a 15-digit Unique Identification Number known as GSTIN. Using GSTIN, an applicant can log in to the GST portal, and the GST network will issue the password by sending it to their registered email id.

The following individuals are eligible to log in to the GST portal:

  • Individuals who wre registered under various taxation system including VAT, service tax, excise duty etc.
  • Individuals having business across India with annual turnover of more than Rs. 40 Lakh.
  • Suppliers and Agents.
  • Input service distributors.
  • E-commerce aggregators.

What is the Difference Between GSTN and GSTIN?

 

GSTN 

GSTIN

Full-Form

Goods and Service Tax Network

Goods and Service Tax Identification Number

Meaning

The Goods and Service Tax Network (GSTN) is set up to provide IT infrastructure for easy compliance and management of the country’s Goods and Service Tax system.

GSTIN is a unique 15-digit number assigned to each taxpayer at the time of registration. It is mandatory for businesses with annual turnover above ₹20 Lakhs.

Objective

The GST Network brings all the taxpayers, centre and state government and other stakeholders under a single framework for tax compliance.

The GSTIN is used by the government and tax authorities to track financial transactions and other tax details of the register

Also read: GSTR-8: Return, Filing, Format, Eligibility & Rules

Conclusion

Implementing all the activities associated with GST has been possible due to the smooth functionalities of GSTN. The platform has offered all possible IT infrastructure to perform all the functions seamlessly. Its strict security measures have also ensured the taxpayers the fair utilisation of their data. The GST network as the Government and private players own the GSTN network. Logging in to the GST portal has enabled taxpayers to pay taxes without relying on others. Overall, GSTN is an effective platform to connect both the Government and taxpayers.
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