GST and Technology Short Answer Type Questions

Question 1.
Discuss about the genesis of GSTN.
Answer:
The GST System Project is a unique and complex IT initiative. It is unique as it seeks, for the first time to establish a uniform interface for the tax payer and a common and shared IT infrastructure between the Centre and States. Currently, the Centre and State indirect tax administrations work under different laws, regulations, procedures and formats and consequently the IT systems work as independent sites.

Integrating them for GST implementation would be complex since it would involve integrating the entire indirect tax ecosystem so as to bring all the tax administrations (Centre, State and Union Territories) to the same level of IT maturity with uniform formats and interfaces for taxpayers and other external stakeholders.

Besides, GST being a destination based tax, the interstate trade of goods and services (IGST) would need a robust settlement mechanism amongst the States and the Centre. This is possible only when there is a strong IT Infrastructure and Service back bone which enables capture, processing and exchange of information amongst the stakeholders (including taxpayers, States and Central Government, Bank and RBI).

Question 2.
What is GSTN? Explain the Structure of GSTN.
Answer:
Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8), non-Government, private limited company. It was incorporated on March 28, 2013.

The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-Government financial institutions. The Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST). The Authorised Capital of the company is Rs. 10,00,00,000 (Rupees ten crore only).

Structure of GSTN:
1. The GST System Project is a unique and complex IT initiative. It is unique as it seeks, for the first time to establish a uniform interface for the tax payer and a common and shared IT infrastructure between the Centre and States. Currently, the Centre and State indirect tax administrations work under different laws, regulations, procedures and formats and consequently the IT systems work as independent sites.

Integrating them for GST implementation would be complex since it would involve integrating the entire indirect tax ecosystem so as to bring all- the tax administrations (Centre, State and Union Territories) to the same level of IT maturity with uniform formats and interfaces for taxpayers and other external stakeholders.

Besides, GST being a destination based tax, the inter- state trade of goods and services (IGST) would need a robust settlement mechanism amongst the States and the Centre. This is possible only when there is a strong IT Infrastructure and Service back bone which enables capture, processing and exchange of information amongst the stakeholders (including tax payers, States and Central Governments, Accounting Offices, Banks and RBI).

2. This aspect was discussed in the 4th meeting of 2010 of the Empowered Committee of State Finance Ministers (EC) held on 21/7/2010. In the said meeting the EC approved creation of an Empowered Group on IT Infrastructure for GST(EG) under the chairmanship of Dr Nandan Nilekani along with five state commissioners of Trade Taxes. Department of Revenue, Ministry of Finance, Government of India vide OM no. S.34011/19/201Q-SO(ST) dated 26th July 2010 notified the Empowered Group on IT Infrastructure for GST with following members:

Member (B&C), CBEC
Additional Secretary (Revenue), DoR
DG (Systems), CBEC as Member-Secretary
FA, Ministry of Finance
Member Secretary, Empowered Group of State Finance Ministers,
Member Technology Advisory Group for Unique Projects (TAGUP)
Commercial Tax Commissioners of Maharashtra, Assam, Karnataka, West Bengal and Gujarat.

3. The Group was mandated to suggest, inter alia, the modalities for setting up a National Information Utility (NIU/ SPV) for implementing the Common Portal to be called GST Network (GSTN) and recommend the structure and terms of reference for the NIU/ SPV, detailed implementation strategy and the road map for its creation in addition to. other items like training, outreach, etc.

4. Prior to this, the Union Ministry of Finance had set up the Technical Advisory Group for Unique Projects (TAGUP) in March 2010 to make recommendations on the roadmap to roll out five major financial projects including GST. TAGUP recommended setting up of National Information Utilities as private companies
with a public purpose for implementation of large and complex Government IT projects including GST.

Question 3.
What services will be rendered by GSTN?
Answer:
GSTN will render the following services through the Common GST Portal:

Registration (including existing taxpayer master migration and issue of PAN based registration number)
Payment management including payment gateways and integration with banking systems
Return filing and processing
Taxpayer management, including account management, notifications, information, and status tracking
Tax authority account and ledger Management
Computation of settlement (including IGST settlement) between the Centre and States; Clearing house for IGST
Processing and reconciliation of GST on import and integration with EDI systems of Customs
MIS including need based information and business intelligence
Maintenance of interfaces between the Common GST Portal and tax administration systems
Provide training to stakeholders
Provide Analytics and Business Intelligence to tax authorities
Carry out research, study best practices and provide training to the stakeholders

Question 4.
What is the interface system between GSTN and the states/CBEC?
Answer:
In GST regime, while taxpayer facing core services of applying for registration, uploading of invoices, filing of return, making tax payments shall be hosted by GST System, all the statutory functions (such as approval of registration, assessment of return, conducting investigation and audit etc.) shall be conducted by the tax authorities of States and Central governments.

Thus, the frontend shall be provided by GSTN and the backend modules shall be developed by states and Central Government themselves. However 24 states (termed as Model 2 states) have asked GSTN to develop their backend modules also. The CBEC and rest of the states (Model 1) have decided to develop and host the back-end modules themselves.

Question 5.
Explain the vision and mission of GSTN.
Answer:
Vision: To become a trusted National Information Utility (NIU) which provides reliable, efficient and robust IT Backbone for the smooth functioning of the Goods & Services Tax regimen enabling economic agents to leverage the entire nation as One Market with minimal Indirect Tax compliance cost.

Mission:

Provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders for ‘implementation of the Goods & Services Tax (GST).
Provide common Registration, Return and Payment services to the Tax payers.
Partner with other agencies for creating an efficient and user-friendly GST Eco-system.
Encourage and collaborate with GST Suvidha Providers (GSPs) to roll out GST Applications for providing simplified services to the stakeholders.
Carry out research, study best practises and provide Training and Consultancy to the Tax authorities and other stakeholders.
Provide efficient Backend Services to the Tax Departments of the Central and State Governments on request.
Develop Tax Payer Profiling Utility (TPU) for Central and State Tax Administration.
Assist Tax authorities in improving Tax compliance and transparency of Tax Administration system.

Question 6.
What will be the role of GSTN in registration?
Answer:
The application for Registration will be made Online on GST Portal. Some of the key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable) will be validated online against respective agency i.e. CBDT, UID, MCA etc, thereby ensuring minimum documentation. The application data, supporting scanned documents shall be sent by GSTN to states/ Centre which in turn shall send the query, if any, approval or rejection intimation and digitally signed registration to GSTN for eventual download by the taxpayer.

Question 7.
What are the basic features of GST common portal?
Answer:
The GST portal shall be accessible over Internet (by Taxpayers and their CAs/Tax Advocates etc.) and Intranet by Tax Officials etc. The portal shall be one single common portal for all GST related services example.

Tax payer registration (New, surrender, cancelation, etc.)
Invoices upload, auto-drafting of Purchase register of buyer Periodic GST Returns filing.
Tax payment including integration with agency banks.
ITC and Cash Ledger and Liability Register.
MIS reporting for tax payers, tax officials and other stakeholders.
BI/Analytics for Tax officials.

Question 8.
What is GSP (GST Suvidha Provider)?
Answer:
A. The GST System is being developed by Infosys, the Managed Service Provider (MSP). The work consists of development of GST Core System, provisioning Of required IT infrastructure to host the GST System and running and operating the system for five years.

The proposed GST envisages all filings by taxpayers electronically. To achieve this, the taxpayer will need tools for uploading invoice information, matching of input tax credit (ITC) claims, creation of party-wise ledgers, uploading of returns, payment of taxes, signing of such document with digital signature etc.

The GST System will have a G2B portal for taxpayers to access the GST Systems, however, that would not be the only way for interacting with the GST system as the taxpayer via his choice of third party applications, which will provide all user interfaces and convenience via desktop, mobile, other interfaces, will be able to interact with the GST system. The third party applications will connect with GST system via secure GST system APIs. All such applications are expected to be developed by third party service providers who have been given a generic name, GST Suvidha Provider or GSP.

Taxpayers will interface with GST System, via GST system portal or via GSP ecosystem provided by way of applications for activities such as Registration, Tax payments, Returns filing and other information exchange with GST core system. The GSPs will become the user agencies of the GST system APIs and build applications and web portals as alternate interface for the taxpayers.