How the GST Network works

GST Network, the IT infrastructure backbone that powers the new indirect tax system, is geared to accept up to three billion invoices a month from 8.5 million taxpayers from day one. The common portal

(www.gst.gov.in) acts as an interface between different stakeholders in the GST ecosystem, namely taxpayers, tax departments, banks, the Reserve Bank of India, external service providers, among others.

The portal becomes the touch point for taxpayer registration, invoice upload, tax payment, getting input tax credit, maintaining the cash ledger and liability register, generating MIS reports for taxpayers, tax officials and other stakeholders, and keeping track of status of returns.

The system matches (or reconciles) the invoice data in a decentralised manner. The sales data uploaded by the seller (GSTR-1) get auto-populated by the GST system in the purchase register of the buyer (GSTR-2). The buyer has to accept, reject or modify the same based on invoice(s) in his possession.

The accepted or modified purchase data will be uploaded by the taxpayer in the GST system as GSTR2. The GST system prepares GSTR-3, the final return, based on GSTR-1 and GSTR-2. This is after the taxpayer squares off his final tax obligation (after accounting for tax on sales minus taxes paid on purchase).

The enrolment of taxpayers for GST has been done in a staggered manner, starting with those who were VAT-registered. The service tax enrolment started towards January-end.

GSTN officials plan to open up the IT system in April for tax officers to work and play around with the software. Around 2,000 tax officers from the Centre and the states have been trained as master trainers in the software.

“They will train other officers and users,” says a senior GSTN executive. From May onwards, the system will be opened for some large taxpayers. “Depending on the user feedback we will clean up the system and be ready by the last week of June for the July roll-out,” the official added.