What parameters are CFOs
focusing on to avoid GST scrutiny?
What parameters are CFOs focusing on to avoid GST scrutiny?
Book a demo to find out!
Index

What is GSTN ( Goods and Service Tax Network )?

Updated on: Jan 12th, 2022

|

2 min read

The Goods and Service Tax Network (or GSTN) is a non-profit, non-government organization. It will manage the entire IT system of the GST portal, which is the mother database for everything GST. The government will use this portal to track every financial transaction and provide taxpayers with all services – from registration to filing taxes and maintaining all tax details.

Structure of GSTN

Private players own a 51% share in the GSTN, and the government owns the rest. The authorized capital of the GSTN is Rs 10 crore (US$1.6 million), of which 49% of the shares are divided equally between the Central and State governments, and the remaining is with private banks.

The GSTN has also been approved for a non-recurring grant of Rs 315 crores. The contract for developing this vast technological backend was awarded to Infosys in September 2015. The GSTN is chaired by Mr Navin Kumar, an Indian Administrative Service servant (1975 batch), who has served in many senior positions with the Govt. of Bihar and the Central Govt.

ShareholderShareholding
Central Government24.5%
State Governments & EC24.5%
HDFC10%
HDFC Bank10%
ICICI Bank10%
NSE Strategic Investment Co10%
LIC Housing Finance Ltd11%
Total100%

Salient Features of the GSTN

The GSTN is a complex IT initiative. It will establish a uniform interface for the taxpayer and also create a common and shared IT infrastructure between the Centre and States.

  • Trusted National Information Utility

The GSTN is a trusted National Information Utility (NIU) providing a reliable, efficient and robust IT backbone for the smooth functioning of GST in India.

  • Handles complex transactions

GST is a destination-based tax. The adjustment of IGST (for inter-state trade) at the government level (Centre & various states) will be extremely complex, considering the sheer volume of transactions all over India. A rapid settlement mechanism amongst the States and the Centre will be possible only when there is a strong IT infrastructure and service backbone which captures, processes and exchanges information. Please read our article to know more about how the Centre and the States will settle IGST.

  • All information will be secure

The government will have strategic control over the GSTN, as it is necessary to keep the information of all taxpayers confidential and secure. The Central Government will have control over the composition of the Board, mechanisms of special resolution and shareholders agreement, and agreements between the GSTN and other state governments. Also, the shareholding pattern is such that the government shareholding of 49% is far more than that of any single private institution.

  • Expenses will be shared

The user charges will be paid entirely by the Central Government and the State Governments in equal proportion (i.e. 50:50) on behalf of all users. The state share will be then apportioned to individual states in proportion to the number of taxpayers in the state.

Volume of expensesType of expenses
Maximum expensesIT system designed by Infosys
2nd partFraud Analytics Tools, security audit and other security functions(will be outsourced based on tender)
3rd partOperating expenses such as salary, rent, office expenses, internal IT facilities

Functions of GSTN

GSTN is the backbone of the common portal, which is the interface between the taxpayers and the government. The entire process of GST is online, starting from registration to the filing of returns. It has to support about 3 billion invoices per month and the subsequent return filing for 65 to 70 lakh taxpayers. The GSTN will handle:

  • Invoices
  • Various returns
  • Registrations
  • Payments & Refunds

What is the GSTIN?

The Goods and Service Tax Identification Number (GSTIN) is the unique number each taxpayer will receive once registered on the common portal. It is based on a taxpayer’s PAN. For more details, please read our article on GSTIN.

How can ClearTax help you?

ClearTax GST is user-friendly, easy-to-use software. It is a cloud-based software (which eliminates the need to download) that can easily be integrated with all existing accounting software. All you need to do is upload or manually enter your invoices.

The software will automatically generate your GST returns and point out any errors in your invoices.  It will also auto-reconcile your returns with those of your buyers and sellers and highlight any discrepancies. Once you have verified your returns, simply click on submit, and your return will be filed on the common portal through our GSPs.

If you are worried about issuing GST-compliant invoices, please use the ClearTax GST billing software, which will help you to generate GST-compliant invoices in no time.

Related articles:

inline CTA
India’s Fastest and Most Advanced 2B Matching
Maximise ITC claims, use smart validations to correct your data and complete 2B matching in <1 minute
summary-logo

Quick Summary

The Goods and Service Tax Network (GSTN) is a non-profit organization managing the IT system of the GST portal. The portal facilitates financial transactions tracking and taxpayer services. The structure involves private players owning 51% of shares, and the government the rest. GSTN aims to establish a uniform taxpayer interface and a strong IT infrastructure for efficient GST functioning in India.

Was this summary helpful?
liked-feedbackliked-feedback

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption