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Introduction to GST Technology

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GST is a historic tax reform in India. The technology platform to manage GST is built as a platform with open APIs.

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Introduction to GST Technology

  1. 1. 1 Goods & Service Tax Introduction
  2. 2. ● 7M Businesses (VAT + ST Base) ● ~5B Invoices/Month in the system ● 37 returns per year instead of 2! ● GST rates are released - range between 5% and 28%. GST Basics Up to Rs. 20 lakhs Up to Rs. 50 lakhs Anything above • Registration is not required • No GST needs to be charged • Can avail Composition scheme • 1% and 2.5% for traders / service providers and manufacturers respectively • Restrictions on who can register
  3. 3. Technology Shift: Pre & Post GSTN Cloud/Mobile based GSTn is fully API based which opens up innovation & flexibility in user experience Full automation due to GET APIs from GST and systems able to auto reconcile (less manual intervention) Banking, Accounting & Tax filing can be bundled Mostly Desktop based Tax filing is cumbersome as it is file & screen-scraping based Manual re-entry & adjustments in accounting, tax filing Silo’ed systems
  4. 4. GSTN Technology Ecosystem Tax Payer Application (Local ERP, Standalone Custom Application, Excel based System etc.) GSP Portal (Providing Excel , csv etc. based invoice upload/GSTR2 download/GSTR1 Summary) GST Server GSP GST Server MPLS SMB
  5. 5. GST APIs - 3 broad types Authentication Returns Ledgers http://developer.gstsystem.co.in/apiportal/
  6. 6. GST Returns - 3 every month GSTR 1 - Sales Information GSTR 2 - Purchase Information GSTR 3 - Consolidated information (1&2)
  7. 7. GSTR 1 Flow SMB Selects a GST Software Application Authentication - One time or OTP Export Sales Register [With Invoice Level Details] Generate GSTR1 in JSON Prepare Return & View Summary [GST portal or Application] Receive Acknowledgeme nt Digitally Sign & Submit Return Every SMB gets a GST portal username & password. He can use this to authorize an application to fetch his details on his behalf He can manually upload a CSV from an external source or his application can perform this function on his behalf CSV of sales invoices have to be converted into a JSON as per format defined by GSTN
  8. 8. GST Filing Process Timeline SMB (Tax Payer) GSTn By 10th - GSTR1 Save / Upload Sales Invoices File Form GSTR1 Return By 15th - GSTR2 Get purchases through GSTR2A Reconcile Purchase register Add / Amend Purchase Details File Form GSTR2 Return By 17th - GSTR2 Accept / Reject buyer changes Get buyer changes through GSTR1A SMB can modify uploaded invoices by counter parties or add additional purchases not uploaded Compare purchase details received with what’s uploaded by counter parties By using better collaboration, SMBs can avoid these discrepancies Generate / Get GSTR3 details File Form GSTR3 Return Make GST Tax Payment By 20th - GSTR3
  9. 9. Life of an SMB: Pre & Post GSTN All my Invoices needs to be GST compliant & uploaded to GST network every month by 10th of the successive month Follow-up for payment from my client is more painful (If I don’t upload my client will not pay as they can’t claim credit) Need to reconcile purchases as mismatches will lead to loss of tax credit and hence it is critical to track purchases too Sending the transactions offline (excel) may not be viable as the returns are broken into 3 stages with tighter deadline & penalty My invoices and expenses are tracked in my system of record (typically excel) and later given to my CA Follow-up for payment from my client is painful (I can send invoice through any medium and claim input credit later) Don’t have time to record my vendor bills so don’t know my total expenses (my CA will do that) Tax payment & filing is a backend process. Multiple sources of data is submitted to the CA who prepares returns
  10. 10. GSTN Compliant Invoice - Sample GSTIN of the supplier is required Place of Supply is critical to determine tax rates applicable (CGST/SCGST) or IGST Every item (Good or Service) need to have either CGST/SGST or IGST Every item needs to have a HSN (Good) or SAC (Service) assigned by GST
  11. 11. Data Driven Decision Making for SMB Credit Others BBPS Digital Payments ETC GSTN Machine Learning & Algorithms Smartphone SMBs C O N S E N T
  12. 12. Thank You

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