When Goods and Services Tax was officially implemented in 2017 in India it brought a significant change in the tax system of the country. The GST implementation aimed to simplify the tax structure by adopting the ‘one nation one tax’ concept.
To complement this overhaul a platform like a GST system project was essential for business to file their GST returns and to develop a uniform interface for the tax payer. For these Goods and Services Tax Network was created.
The GSTN has not only integrated the entire indirect tax ecosystem of the country but also aligned the IT maturity of all the tax administrations. Let us understand the complete acronym GSTN, and examine its various roles and functions.
GSTN: Full Form and Definition
GSTN stands for Goods and Services Tax Network. The Goods and Services Tax Network (GSTN) also called GST Network is a non-profit, fully-owned government company that has developed an Indirect Taxation platform for GST to assist taxpayers in India with tasks such as preparing, filing returns, making payments for indirect tax obligations, and fulfilling other compliances.
GSTN offers IT infrastructure and services to both the Central and State Governments, as well as taxpayers and other relevant parties, to facilitate the implementation of the Goods and Services Tax (GST) in India.
The GST Network initiative brought together the previously separate and independently functioning IT systems of the Centre and State indirect tax administrations, which operated under different laws, regulations, procedures, and formats.
Silent Features of Goods and Service Tax Network
The GSTN is the exclusive national agency responsible for providing efficient and reliable provision related to indirect taxation across multiple tax authorities.
We know that GST is a destination-based tax. This makes it very difficult to manage complex transactions. The reconciliation of Integrated Goods and Services Tax (IGST) at both central government and state government levels becomes highly intricate due to the sheer volume of transactions taking place within India.
The GSTN is based on a self-sustaining revenue model which means that it levies user charges on tax payers and tax authorities availing services.
Some of its silent features include:
1. National Information Utility (NIU)
GSTN provides a robust IT infrastructure and service backbone, facilitating the capture, processing, and exchange of information among various stakeholders, including taxpayers, State and Central Governments, Accounting Offices, Banks, and the Reserve Bank of India (RBI).
2. Information Security
The central government is primarily responsible for preserving the security and confidentiality of GSTN data. It manages the composition of the board, shareholder agreements, resolution mechanisms, and agreements with state governments.
3. Ownership
Government and Private Partnership: Ownership is distributed between the government (49%) and private entities (51%), including banks and financial institutions. The central government holds a major share compared to individual stakeholders.
4. Payment Modes
Online Mode: Allows taxpayers to make tax payments online through Internet banking facilities and designated agency banks.
Offline Mode: Permits over-the-counter tax payments at select agency banks, with details communicated to RBI and GSTN for updating.
5. Financial Maintenance
Central and state governments share expenses for utility, infrastructure maintenance, and other GSTN operations. Each state’s share of expenses is calculated based on the number of taxpayers in the state.
Key Functions of GSTN
Under the GST regime, the GST network is responsible for hosting essential services for the tax payers and the tax authorities like EWay bill, E-invoice, Invoice incentivisation, etc. Other than this some of the silent features of GSTN are:
Analysis of Taxpayer’s Profile
Thoroughly verifies taxpayer details for registration and submits them to central and state governments for approval.
Registration
Once verified and approved, GSTN alots a Goods and Service Tax Identification Number (GSTIN) to the taxpayer and notifies relevant tax authorities. Thus, it Serves as a bridge between taxpayers and government during the registration process.
Tallying Invoice
Compares purchase and sale invoices to identify and resolve discrepancies, ensuring taxpayers can avail Input Tax Credit (ITC) benefits.
Filing Returns
Provides a unified and hassle-free return filing process for State GST (SGST), Integrated GST (IGST), and Central GST (CGST). GSTN Processes and forwards filed returns to both central and state governments.
Structure of the GST Network
The Goods and Services Tax Network (GSTN) is structured to facilitate a uniform interface for tax payers and governments, establishing a common technology infrastructure between the central and state governments.
The key elements of GSTN’s structure are as follows:
Ownership Distribution:
Private Entities shareholding: Hold 51% of GSTN’s stake.
Government shareholding: Owns the remaining 49% stake.
Authorized Share Capital:
Total: Rs. 10 Crores.
Distribution:
49% equally divided between the Central and various state governments.
51% distributed among private banks.
Non-recurring Grant:
Grant Amount: Rs. 315 Crores.
Purpose: Sanctioned for sophisticated backend development by Infosys Technologies Ltd.
Shareholding Structure:
Central Government: 24.5%
State Governments and EC: 24.5%
HDFC: 10%
HDFC Bank: 10%
ICICI Bank: 10%
NSE Strategic Investment Co: 10%
LIC Housing Finance Ltd: 11%
Total Shareholding:
The sum of Individual Shareholdings: 100%
What is GSTIN?
GSTIN stands for Goods and Services Tax Identification Number. It is a unique identification number comprising 15 digits and is assigned to every taxpayer registered under the GST regime. Businesses with an annual turnover of INR 40 Lakh must register under the GST to obtain GSTIN.
Suggested Read: What is GSTIN Number? Meaning, Format and Structure
How to Apply For GSTIN
Now, that we know about the GST Identification Number, let us know the step-by-step procedure
Step 1
Visit the official GST portal for registration
Step 2
Select ‘New Registration’ and enter the details like
- Taxpayer type
- State
- The legal name of the business/entity
- PAN of Business/ Proprietor/LLP
- Email address of the Primary Authorized Signatory
- Mobile number
Step 3
Enter the OTP sent to your mobile number or email address for verification.
Step 4
After the verification, a Temporary Reference Number (TRN) will be generated.
Step 5
Complete Part B of the application within 15 days by logging in with the generated TRN.
Step 6
Enter the OTP sent to your mobile number or email address
Step 7
Submit business information like
- Trade name of the business
- Constitution of the Business
- District and sector
- Commissionerate Code, Division Code, and Range Code
- Composition Scheme requirement
- Date of commencement of business.
- Date of Registration
Step 8
Submit the application by using any of the below-mentioned methods
- Electronic Verification Code (EVC)
- Digital Signature Certificate (compulsory for companies and LLPs)
- E-signature method
Step 9
After the verification, the Acknowledgment Receipt Number (ARN) will be provided on the registered mobile number.
Step 10
Once the documents provided are verified by a GST officer, a Certificate of GST Registration is issued to the applicant along with the GST Identification Number.
Frequently Asked Questions
What is the share of private equity stake holders in the GSTN?
The private entities own 51% of the GSTN’s stake.
What are the different types of GST?
There are 4 types of GST namely,
- Central GST (CGST)
- State GST (SGST)
- Union GST (UGST)
- Integrated GST(IGST)
Suggested Read: 4 Types of GST in India: What is CGST, SGST, IGST & UGST?
Is GSTN and GSTIN same?
Both GSTN and GSTIN are completely different terms.
GSTN stands for Goods and Services Tax Network and is a non-profit organization that provides an IT infrastructure to run the GST portal.
GSTIN stands for Goods and Service Tax Identification Number and is a unique 15-digit number provided to the business registered under the GST portal.
Who controls GST in India?
The GST Council, the constitutional body responsible for making rules and recommendations on GST-related issues controls GST in India.
