With GST the government intends to achieve the two major goals: Reduce tax evasion & Simplify compliance for tax payers.

In the prevailing tax systems, there are several cases where the government has not been able to detect evasion and loss of tax revenues. As a result, it has become a challenge for the department concerned to track the input claims against the liability of the seller. There have also been numerous cases of duplication of claims on input tax, fraudulent claims, input tax claims that do not correspond with tax liability declared by the seller, or seller who has not furnished his tax liability.

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In order to overcome this, GST has introduced technology.  It seeks to establish a uniform interface for the taxpayer and a common and shared IT infrastructure between the center and states. It will thereby integrate multiple tax department websites, bringing all the tax administrations (center, state, and union territories) to the same level of IT maturity, with uniform formats and interfaces for taxpayers and other external stakeholders. Unlike the present-day taxes, GST is going to be on a digital platform from its inception.

Institutional mechanism
For the implementation of the technology associated with the GST, the Goods and Services Tax Network (GSTN) has been established. It is a non-profit, public private partnership company. Its primary purpose is to provide IT infrastructure and services to central and state governments, taxpayers and other stakeholders, thereby facilitating the implementation of the Goods and Services Tax (GST).

GSTN will perform the overall functions of GST IT system which are mentioned below:-

  • Assisting in Registration Process.
  • Transmitting the returns to the Central and State Government.
  • Calculation of IGST.
  • Confirming or matching the payment details with banking network.
  • Giving MIS reports or Data to the Central and State Government and it includes all information of taxpayer.
  • Giving analysis of taxpayers' profile.
  • Running the matching engine for matching, reversal and reclaim of input tax credit.
  • Generate business intelligence and analytics.

The salient features are:

  • The GSTN server, with an open Application Program Interface (API), will provide convenience and an all user interface by connecting seamlessly with third party applications used by taxpayers through their mobiles, tablets and desktops.
  • Such a move will help taxpayers in automating invoice matching from their software itself without the need to log on to the portal, thereby ensuring simplicity of compliance and savings of time. Technology will also bring in efficiency in tax administration for returns filing, registration, data exchange and effectual auditing, monitoring, investigation and performance analysis with minimal or zero human intervention.
  • For businesses too, technology will be key to survive and thrive in the post-GST era. Given that invoice matching is a crucial component of GST and is linked to stringent timelines, it would need a solution that is both agile and accurate.
  • Companies would also have to deploy software that has the desired robustness to talk to the GSTN system, and also helps them in achieving reliable, accurate, and immediate compliance. Besides, they would have to move from manual to automated systems to ensure speedy and timely invoice matching. As a starting point, companies would have to understand the impact of GST and technology on their business. They would have to acknowledge the important of compliance and decide on the right software solution to adhering to the compliance requirements.

About GST Suvidha Provider (GSP)
GST Suvidha Provider (GSP) and Application Service providers (ASP) will be the significant players in the success of the tax regime.

GSP is an acronym of GST Suvidha Provider. Through GSP, it allows user or taxpayers to execute the provisions of GST through the online platform. A GSP is considered as an enabler for the taxpayer to comply with the provisions of the GST law through the web platform. Through GSP, Tax Payers or Individuals can file their returns.

GSP's are controlled by the government and it operates as per the MoU. An agreement is signed between GSTN (a government body) and GSP. Through GSP and ASP, users or taxpayers file their returns online. In GSP and ASP, users or taxpayers have to fill their necessary details and automatically returns will be calculated. It also focuses on taking out the details of the tax payer and convert them into the GST Returns. These GST Returns are then filed on behalf of the taxpayer with GSTN via GSP.

About Application Service Providers (ASP)

ASP is an acronym of Application Service Provider. Taxpayer or users can file their GST taxes with the support of ASP partners or existing software. ASPs can develop an end- to-end solution for corporates, consultants, and taxpayers. Through ASPs, the taxpayer and consultants can manage the sale or purchase of goods and services and GST filing.

A large number of companies have an options to file return via Application Service Provider (ASP). In ASP, organizations or businesses must have to share the detailed data of sales and purchase of Goods and Services to the ASP. After then ASP providers will prepare the GST Returns and file the returns through GSP (GST Suvidha Provider).

ASP will play the vital role in filing returns as well as it saves the time of users. It collects all data or information from the taxpayers or users and then converts them into tax returns. ASP will take care of five roles which are mentioned below:-

  • Data Protection & Privacy:- ASP will handle most of the sensitive data of an organization. This data includes who do you sell and where? What do you sell? How much do you sell and at what price? It's not all. An ASP has also required information about purchases. Overall an ASP will gather data or information from the taxpayers for filing the returns.
  • Data Verification:- The details you submitted to ASP will be used for filing GST Returns. Make sure that details you have provided is true and authenticated as belonging to you without a doubt. Any mislead details or data can lead to incorrect returns which will lead to liabilities for the tax filing entity. The responsibility of filing correct returns lies with the company and its corporate officers.
  • Data Archiving & Retrieval:- ASP will provide long term Data Archiving and Retrieval. At ASP, you will store data of 8 years beyond the date of filing of the annual returns for the year will be stored.
  • Audit Features: - ASP will maintain all information details in the system starting from the from the point of upload till the creation of the returns. Cross check the audit features are available as a part of the ASP Platform.
  • Application and Process Control:- Filing return is the responsibility of the corporate officers. So it's essential to establish and ASP will provide you full control of the process. Filing accurate returns is essential in the context of India because raising of all disputes in case of inconsistency is the responsibility of the filer. Not filing the dispute in particular time can lead to the material impact on the net tax liability.

Use of technology will also enable efficient tax administration for registration, returns filing, data exchange, and effective investigation, monitoring, auditing and performance analysis with little or no human intervention. It will also provide several user-friendly features such as offline capabilities, alerting capabilities, mobile/tablet interface, and additional mechanisms to avoid duplicity of data.

As this tax system is being implemented for the first time in India, businesses will encounter several challenges during the initial stages of implementation. However, once systems are streamlined, the two important objectives envisaged - curbing tax evasion, and increasing tax revenue and ease of compliance for taxpayers will be achieved.

The success of this transformation will help our nation create history in the world of GST compliance.


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