The document provides details about the Goods and Services Tax Network (GSTN) in India. It discusses that GSTN is a non-profit organization that manages the IT system and portal for GST. Private players own 51% of GSTN shares while the rest are owned by the central and state governments. The GSTN contract was awarded to Infosys to develop the system. Several issues have been faced with the GSTN portal including crashes, erroneous penalties, and lack of an offline filing tool. Infosys has received criticism for the technical glitches but has responded that the large scale of the project and rapid policy changes have contributed to problems. Deadlines for filing July and August GST returns were

1. Analysis of the GSTN: Does it have a smooth
working?
Anni Gupta (2013IPG-022)
Deepak Kumar (2013IPG-037)

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

3. Structure of GSTN
Private players own 51% share in the GSTN,
and the rest is owned by the government.
The authorized capital of the GSTN is ₹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.

4. Organization Structure

5. 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 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.

6. • 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 at 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.

7. Funding of GSTN
Year Funds released by GoI Actual Expenditure by GSTN
2013-14 3,03,65,612 3,03,65,612
2014-15 20,00,00,000 13,80,31,415
2015-16 120,93,00,000 45,27,97,027
Total 143,96,65,612 62,11,94,054
The Empowered Committee of State Finance Ministers has, in its meeting held on 30th Aug 2016, approved
the Revenue Model of GSTN which is based on taking commercial loan from a commercial bank for its pre-
operative fund requirement of Rs. 550 crores in FY 2016-17, which includes payments to M/S Infosys, the
Managed Service Provider developing the software and providing required hardware and software licenses.

8. Internal Financial Control and Procurement
GSTN has developed its own Finance and Accounts Manual to define the roles and responsibilities of the
functionaries working in GSTN, establish sound internal controls and define the accounting policies and procedures
to be followed by GSTN. The Manual complies with Accounting Standards issued by The Institute of Chartered
Accountants of India and the Companies Act 2013 and is largely based on GFR 2005.
Expenses of GSTN
The major chunk of expenses to be incurred by GSTN consists of payment to Managed Service Provider M/S Infosys
for design and development of GST Systems, supply of all underlying infrastructure, software licenses, bandwidth
and operation and maintenance of GST systems for five years from the go-live date. M/S Infosys was selected by
open tendering process. The second chunk will be on ‘Fraud Analytics Tools’ and team to run the same during
project operation period along with cost of security audit and other program governance functions. The agency to
do this function will be selected through open tendering process. The third component is operating expenses of
GSTN which consists of salary, rent of office building, office expenses, internal IT facilities, etc.

9. GST IT Strategy: Role
assigned to GSTN
Creation of common and shared IT infrastructure
for functions facing taxpayers has been assigned
to GSTN and these are filing of registration
application, filing of return, creation of challan for
tax payment, settlement of IGST payment (like a
clearing house), generation of business
intelligence and analytics. All statutory functions
to be performed by tax officials under GST like
approval of registration, assessment, audit,
appeal, enforcement etc. will remain with the
respective tax departments. The diagram below
shows the work distribution.

10. Role of GSTN in Payment of GST by Taxpayers
Under GST, all challans will have to be prepared by taxpayers on the GST portal only. This has been done to ensure that
bank tellers do not enter wrong TIN number from hand written challans as happens sometimes today. Once Challan is
created with GSTIN, name of taxpayer, amount under various tax heads and sub-heads, the taxpayer has following two
options to pay the tax:
1. He can choose online option under which, he will have to choose one of the agency banks (i.e. banks authorized
by RBI to collect GST on their behalf) from the dropdown menu and after that he will be taken to the website of
chosen bank to make payment by providing user ID and password of bank. After completion of payment, he will be
brought back to GST portal from where he can download the paid challan, which is generated by GST System on
confirmation from the Bank.
2. The other option of tax payment is to print the challan and present the same in the relevant bank for ‘Over the
Counter Payment’ (OTC). The bank after realizing the payment will transfer the money to RBI and send
confirmation of payment to GST Portal for accounting.
“No tax money will ever come to GSTN in any manner. GSTN will only get conformation of payment
from the Banks.”

11. Role of GSTN with respect to Filing of Returns
Under GST, there will be common return for CGST, SGST and IGST, eliminating the need to file
separate tax returns with Central and state GST authorities. Checking of claim of Input Tax
Credit (ITC) is one of the fundamental pillars of GST, for which data of Business to Business
(B2B) invoices have to be uploaded and matched. The Common GST Portal created and
managed by GSTN will do this matching on the basis of invoice level data filed as part of
return by all taxpayers. Similar exercise will be done for inter-state supplies where goods or
services will move from the state of origin to the state of consumption and so will the taxes.
The claim of IGST and its utilization will be settled based on returns filed at the Common GST
portal.

12. Role of GSTN with respect to Registration Application
Under GST, the registration of taxpayers will be common under Central and State GST and hence one place of
filing application for the same i.e. the Common GST portal. The application so received will be checked for its
completeness by the GST portal, which will also carry out validation of data like PAN from CBDT, CIN/DIN from
MCA and Aadhaar of promoters, if provided, from UIDAI. After completion of validation, the registration
application will be shared with respective central and state tax authorities. Query of tax authorities, if any and
their final decision will be communicated to GST portal which in turn will communicate the same to the taxpayer.
Access to Data
The design of GST systems is based on role based access. The taxpayer can access his own data through identified
applications like registration, return, view ledger etc. The tax official having jurisdiction, as per GST law, can access
the data. Data can be accessed by audit authorities as per law. No other entity can have any access to data

13. Monthly Compliance Cycle
The monthly GST compliance cycle to be followed would be as follows:
i. On 10th of subsequent month—Details of outward supply would be filed in Form GSTR 1
ii. On 11th—Auto populated purchase details would need to be downloaded in Form GSTR 2A
iii. By 15th—GSTR 2A details would need to be validated and uploaded in Form GSTR 2
iv. By 17th—Validated details in Form GSTR 1A based on recipient’s filing in Form GSTR 2 would need to be
checked and uploaded
v. On 18th—Auto populated Part A of GSTR 3 with all supply and purchase details would be generated and
the same needs to be downloaded
vi. Between 18th and 20th—Tax payment needs to be made
vii. By 20th—Once the tax payment challan number is generated, post insertion of the said number in Part B
of GSTR 3, the final return needs to be submitted.

14. Infosys & GSTN
Infosys was awarded a five-year contract worth Rs. 1,380 crore to develop GSTN in September 2015. Many
technical glitches have been at the core of the GST rollout since July 1 due to which several states had raised
the issues being faced by taxpayers in the 21st GST Council meeting on September 9. Subsequently, a five-
member Group of Ministers (GoM) headed by Bihar’s deputy chief minister Sushil Modi was constituted to
monitor technology-related implementation issues of GST. The GoM held its first meeting in Bengaluru on
September 16 where it identified 27 issues and asked Infosys to sort them.

15. Issues faced by GSTN
A high-powered group of ministers will meet every fortnight to resolve over two dozen technical
glitches identified in the GST tax portal GSTN, the panels head and Bihar Deputy Chief Minister Sushil
Modi has said.
Over 25-odd glitches, which had led to the GST-Network portal crashing on at least two occasions in
the very first month of filing, relate largely to payments and registration. The grouping had extensive
interaction with executives of Infosys, which is providing the IT support for the portal, and businesses
will notice a "lot of difference" on the GSTN portal in the next 7-10 days.
1. Crashes
2. Erroneous Penalty
3. Offline Tool

16. 1. Crashes
Good and service tax Network (GSTN), the only official website for GST enrollment crashes for the
second time. The government allows tax payers to get fresh Registration under GST from 25th June.
But the website crashes as soon as the clock struck 12.
Earlier on 15th June too, the website was crashed due to heavy traffic as this was supposed to be the
last date for migrating into GST Regime. Later on, it was communicated that the Enrollment
procedure shall be open again from 25th June.

17. 2. Erroneous Penalty
More respite could be on the way small and medium enterprises (SMEs), with the goods and services tax (GST)
council set to ease a string of procedures, including partial relief on penalties on late filing of GST returns. The
tax department's proposal, if approved by the GST Council in its next meeting on November 10 on Guwahati,
will lessen the struggles of small businesses still grappling to understand the nuances of the new indirect tax
system that was rolled out from July 1. The idea is that an entity should not end up paying penalty higher than
his tax liability, however, doesn't intend to waive off the entire late fee.

18. 3. Offline Tool
GST Network today said it has launched an offline tool for businesses to quarterly file a form detailing
inputs or capital goods sent to job workers and received back from them. The excel-based offline tool
has been made available for preparing and uploading the statement in form GST ITC-04. The tool can
be accessed at 'Download' section of GST portal, GSTN said in a statement.
As per GST (Goods and Services Tax) Rule 45, details of inputs or capital goods sent to job worker and
received back from them need to be furnished on a quarterly basis in ITC-04.

19. Criticism Faced by Infosys
Infosys Technologies on Thursday took on criticism about the glitches that have affected the performance of
the fledgling Goods and Services Tax portal, and attributed implementation problems to the large scale of the
project as well as ‘rapid changes in policy and integration issues with related IT ecosystems’.
A significant portion of the problems under the GST since its roll-out in July have been due to issues taxpayers
have faced in uploading tax returns on the GST portal. This prompted the GST Council to set up a Group of
Ministers last month to look into problems being faced.

20. Response of Infosys
“Given the complex nature of the project and rapid change management, there have been several stakeholder
concerns that have also been raised,” Infosys added. “Some of our finest engineers are supporting the GSTN
(GST Network) team as they work towards resolving these and serving all stakeholders.”
Infosys’ statement is in response to a letter from the Confederation of All India Traders (CAIT) urging the
government to initiate a CBI probe on Infosys and other companies for the “poor and dismal performance” of
the GST portal.
“Infosys is very proud to be associated with the prestigious GST project which is the largest tax project of its
kind in the world,” the company said. “The system has already demonstrated success across several
parameters — till date 37 crore invoices have been uploaded on the system while the system is designed to
handle 300 to 320 crore invoices every month. Seventy lakh tax payers have successfully migrated to the new
system and the country has recorded 25 lakh new registered taxpayers.”

21. Last date for filing of GST returns for
July, August was extended
Businesses will have more time to file the final goods and services tax (GST) returns as the
government on Monday extended the last date for filing of sales and purchase data as well as
payment of taxes for the months of July and August.
Now sales return or GSTR-1 for July will have to be filed by 10 September instead of 5 September
earlier and purchase returns or GSTR-2 would be filed by 25 September instead of 10 September
earlier. GSTR-3, which is the match of GSTR-1 and GSTR-2, will have to be filed by 30 September, in
place of 15 September.

22. 37,00,000
GST Returns in September

23. Statistics
Nearly 37 lakhs GST returns for September have been filed till 1900 hours and 75,000 sales data is
being uploaded on the GSTN portal on hourly basis, its Chairman Ajay Bhushan Pandey said. The
deadline for filing the initial returns in GSTR- 3B for September under the Goods and Services Tax
regime ends midnight yesterday. In an interview to PTI, Pandey said the GSTN system is stable and
has been handling data at just 30 per cent of its capacity with 20 lakh returns being uploaded in
last two days.

24. GSTN Outreach & Capability Building Initiatives
There has been a paradigm shift in the tax regime and for its wider acceptance, dissemination of
information and knowledge to all stakeholders is the first step for its success. Our effort is to provide
support and promote self- learning through various artefacts like videos, user manuals, FAQs. Also, we
are using WebEx and webinar as a means for dissemination of knowledge. All the learning material is
readily available in the Help section of GST portal (www.gst.gov.in).

25. SEPTEMBER 2017
1. WEBINARS CONDUCTED

26. 2. TRAINING FOR STAKEHOLDERS
• Training for CSC Executives
• Training conducted by NIELiT Master Trainers
Master Trainers trained total of 757 stakeholders as per the details
given below:
• Training for Taxpayers Help Desk Executives

27. 3. TRAINING FOR TAX OFFICIALS AND TAXPAYERS
Interactive session was conducted for Tax Officials from various States in Bangalore on 15th Sep 2017.
Also, a meeting of Group of Ministers for IT implementation was conducted at Vidhan Soudha,
Bengaluru on September 16, 2017. The queries were answered and mechanism was developed for
handholding the states regarding the technical issues faced by taxpayers while working on GST Portal so
far.

28. 1. WEBINARS CONDUCTED
OCTOBER 2017

29. TRAINING THROUGH WEBEX
Throughout the month, Training for State Tax Officials was done from time to time by
conducting training through WebEx. Whenever a new functionality was released
sessions were conducted to create awareness about new features and tips to navigate
through GST Portal. WebEx sessions were also conducted for Helpdesk Executives to
reduce the time lag in disseminating information. New functionalities released during
the month like ITC04, PMT 07 etc. were discussed and explained at length to relevant
stakeholders.

30. SOCIAL MEDIA
Digital media has a lot of buzz around GST as it is a new topic for taxpayers and other stakeholders, hence need was
felt to provide enough material on social media so that taxpayers have an authentic source of accessing
information/latest developments on GST Portal.
a) YouTubeChannel (www.Youtube.com/c/goodsandservicestaxnetwork).
The subscriber base of the official channel has increased manifold in the past one month, currently 19000
subscribers are regularly being engaged through the following artefacts:
i) Webinars
ii) Videos
iii) GST ki Masterclass
iv) Interviews
v) Workshops for Taxpayers

31. b) Facebook: (www.facebook.com/gstsystemsindia) The most popular social networking site like Facebook is
actively being used to announce the latest developments on GST Portal. The dissemination of important dates
and introduction of new features on GST portal is also done regularly.
c) Twitter: (@AskGSTech)
Twitter handle is used to announce the latest developments on GST Portal. The effort is also made to guide tax
payers by sharing brief step by step creatives about the new functionalities on GST Portal. Dissemination of
notifications is faster through the twitter handle.

32. Since India dealt with a very complex system of VAT and simplifying it is a very tedious task. Every
now and them, policies are formed based on people and businesses grievances. It would take a
while to develop a smooth working system by resolving loopholes time-to-time. Currently,
Government of India and GoM has decided not to extend any more deadlines as it did for July and
August due to the failure of the GSTN but in our view, it will totally depend on the conditions that
would be prevailing in the upcoming months.
CONCLUSION