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The Goods and Services Tax constitutional amendment having been promulgated by the Govt of India, the rollout of the GST Bill will be a collective effort of the Central and State Governments, the tax payers and the IT platform provider i.e. GSTN, CBEC and State Tax Departments. Besides these main participants there are going to be other stakeholders e.g. Central and States tax authorities, RBI, the Banks, the tax professionals (tax return preparers, Chartered Accountants, Tax Advocates, STPs etc.), financial services providing companies like ERP companies and Tax Accounting Software Providers etc.
The GST System is going to 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. The GSPs are envisaged to provide innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST Systems from registration of entity to uploading of invoice details to filing of returns. Thus there will be two sets of interactions, one between the App user and the GSP and the second between the GSP and the GST System. It is envisaged that App provider and GSP could be the same entity. Another version could where data in required format directly goes to GSP-GST Server. The diagram below gives the most generic case.
In the evolving environment of the new GST regime it is envisioned that the GST Suvidha Providers (GSP) concept is going to play a very important and strategic role. It is the endeavour of GSTN to build the GSP eco system, ensure its success by putting in place an open, transparent and participative framework for capable and motivated enterprises and entrepreneurs.
GST Compliance Requirement by the Taxpayer
The taxpayer under GST Regime will have to provide following information at regular intervals:
✓Invoice data upload (B2B and large value B2C)
✓Upload GSTR-1 (return containing supply data) which will be created based on invoice data and some other data provided by the taxpayer.
✓Download data on inward supplies (receipts or purchase) in the form of Draft GSTR-2 from GST Portal created by the Portal based on GSTR-1 filed by corresponding suppliers.
✓Do matching of purchases made and that downloaded from GST portal. Finalize the same based on his own purchase (inward supply data) and upload GSTR-2
✓File GSTR-3 created by GST Portal based on GSTR-1 and 2 and other info and tax paid.
✓Similarly there are other returns for other categories of taxpayers like casual taxpayer or composition taxpayers.
It is expected that the GSPs shall provide the tax payers with all services mentioned above in addition to maintaining their individual business ledgers (sales ledger and purchase ledger) and other value added services around the same. Another important service expected from GSPs is the automatic reconciliation of purchase made and entered in the purchase register and data downloaded in the form of GSTR-2 from the GST portal. In additional there will be sector-specific or trade specific needs which the GSPs are expected to fulfil. The conceptual diagram depicting the same is as given below.
Design & Implementation Framework
Tax payer’s convenience will be a key in success of GST regime. The tax payer should have a choice to use third party applications which can provide varied interfaces on desktops, laptops and mobiles and can connect with GST System. The GSP developed apps will connect with the GST system via secure GST system APIs. Majority of GST system functionalities related to taxpayer’s GST compliance requirements shall be available to the GSP through APIs. GSPs may use GST APIs and enrich and enhance the tax payer’s experience. (The APIs of GST System are RESTful, json-based and stateless). GST System will not be available over the Internet for security reasons.
The production API end points can only be consumed via MPLS lines. All APIs will be accessed over HTTPS protocol. The benefits of API based integration are:
✓Consumption across technologies and platforms (mobile, tablets, desktops, etc.) based on the individual requirements
✓Automated upload and download of data
✓Ability to adapt to changing taxation and other business rules and end user usage models.
✓Integration with customer software (ERP, Accounting systems) that tax payers and others are already using for their day to day activities