GST Network (GSTN) &

Computerization Program Preparing for GST

2nd June 2012Sanjay Bhatia,

Commissioner of Sales Tax,Maharashtra

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GST Current status

• Discussion paper on GST published in November 2009

• Constitutional amendment bill being evaluated by Standing Committee

• Computerization for GST in initial stages through Empowered Group on IT infrastructure (Nilekani Committee) and Mission Mode Project.

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Need for Computerization

• VAT experience – VAT from 01.04.2005 without computerization – Geographical administration changed to functional

administration – Mandatory assessment replaced by assessment / audit

by exception – Single point levy at first stage replaced by multi point

levy of tax thereby ITC claimed at each stage of sale– Legacy of huge return default and incorrect and

incomplete filing of returns

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Need for Computerization• As quality data not available and automation was not in place so

implementation of VAT became very difficult. Steps taken for computerization – Correct and complete filing of returns ensured through electronic filing – ITC verification ensured through electronic cross checks using electronic

sales and purchase annexure – CST form distribution mechanism established through online electronic

application– E-payment of tax made mandatory – Other e-services like e-registration ECS of refunds etc., started – This computerization took 4 to 5 years after VAT introduction.

• VAT experience has taught that computerization is a must for smooth implementation of GST

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Computerization Initiatives• At national level MMP and TINXSYS teams

conducted study on status of computerization in different states

_ States at different level of computerization – Maharashtra, TN, Kerala, AP, Karnataka and Gujarat

ahead of other States• EC and GOI set up Empowered Group on IT

infrastructure(EGIT) for implementation of computerization under the Chairmanship of Mr. Nandan Nilekani

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Empowered Group On IT

Members comprise of CBEC, Dept Of Revenue and State Commissioners . – Concept paper prepared on opening national level

common portal for e-services. Uniform systems of Registration, Return filing and e-Payments to be made available on this portal to all the States

– Cafeteria Model for automation i.e. other services to be provided on payment basis through common portal

• Computerization to be implemented through national level GST Network (GSTN)

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GSTNBackground

• Empowered Committee approved creation of SPV, a non-Government Company registered under the Companies Act, 1956

• Key objective to provide shared infrastructure and services to Centre and State Governments

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GSTN

• EC consensus on having Common Portal providing three core services common across the country– Dealer registration, – Tax payments and – Returns acceptance

• EGIT – to evaluate suitable agency for incubating the National Information

Utility (NIU) for GST. – National Securities Depository Limited (NSDL) was selected as

technology partner for incubating NIU to operate the IT backbone for GST”.

• EGIT, CBEC, JWG of EC and NSDL have evolved a strategy for implementing GSTN

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GSTNArea of Operation

Three optionsa. Full Service Model-full range of GST servicesb. Limited Service Model- Only Registration,

Returns and Payment on GSTNc. Application Programming Interface (API)-

Operational flexibility to states but adhere to common process

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GSTNAction Plan

• Build efficient and convenient interfaces with tax payers tax administrators and other stakeholders like banks, CBDT etc.

• Facilitate, implement and set standards for providing common GST services to the centre and state Government.

• Carry out research, study global best practices and provide training to the stakeholders

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GSTN Functions

• Tax Payers management including account management, notification, information, status tracking.

• Tax Authority Account / ledger Management • Computation of settlement (including IGST settlement )

among centre and states • Processing and reconciliation of import GST and integration

with Customs EDI systems • MIS including need based information and business

intelligence • Maintenance of interfaces between the common portal

and tax administration systems

GSTN Functions

• GSTN portal will be launched to provide information

to taxpayers

• Updated information about Act, Rules, Notifications,

Circulars, procedures would be available

• Portal to be integrated with automation systems of

all states

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GSTN Present Status

• Central Portal under development by NSDL • Online Registration application ready• Eleven states identified for pilot project.• States in the process of modifying their

applications in line with GST procedures.• UAT set up being prepared. - Following options being explored-

• Shared UAT set up by NSDL• Cloud services by BSNLGSTN to be operational by August 2012

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GSTN

• Process of actual setting up of GSTN is on• GSTN to first handle:- – 360° Pilot Project of Maharashtra & its expansion

to other states.– TINXSYS – Management of Pilot Project of 11 states.

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Scope of Work

• Development of Registration Module and migration of dealer registration data

• Development of Return Filing and processing including ITC matching

• Development of payment Module• Development of IGST settlement Module• Providing MIS

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Way forward – for Pilot • PAN Updation by States / UTs• States / UTs to estimate efforts for modification to existing VAT systems • Setting up of Test Set-Up by States / UTs• Modify the State /UTs VAT System• Establish interface with the common Portal• Invite Dealers / Vendors for testing the modules • Banks to make necessary system changes to CBS• Full round of testing by all entities• All 35 States / UTs sensitized regarding GST Pilot and related activities• Existing dealer data received from 33 states / UTs /Centre analyzed and

shared ( 2 UTs have no dealers)

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Challenges in GSTN

• Finalization of common Registration, Return & Payment format.

• Setting up of GSTN• IGST settlement• Getting all PANs• Handling of legacy data• Passwords for 60 Lac dealers• Interface with state’s existing systems.

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Challenges/Issues in GST

• Handling of issues of administration (Dual Control)• Interstate transactions – whether IGST?• Interstate transactions - Settlement mechanism • RNR ( Revenue Neutral Rate) issues.• Differential thresholds

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Thank You

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Registration Process Features

• On line registration• Single application – Centre, State & across the

States• Mandatory PAN• No physical record• Defined uniform process• Status tracking system• Time bound registration• Online amendment• Possibility of ‘No registration certificate’

– status check online

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Returns ProcessFeatures

• Common portal to accept return• Mandatory e-filing and e-payment• Single return in each State for Centre, State

& all Acts• Returns along with annexure containing

sale-purchase details• Help available for e-filing• Revision of returns• Annual audit report instead annual return