Frontend Business Process on GSTN Portal Presentation Plan

Frontend Business Process on GSTN Portal

Presentation Plan 1. 2. 3. 4. Key Data-points Structure of GSTN IT Strategy Rollout Strategy (Model-1 and Model-2 States) 5. Information Management 6. Demo of Registration, Payment and Return

Goods and Services Tax Network (GSTN): The IT Backbone of GST a. 70 to 80 Lakhs taxpayers; b. 260 to 300 Crores B 2 B invoice data per month • Strong IT c. More than 120, 000 tax Infrastructure officials to work • Independent d. Monthly filing of returns • Flexibility of Pvt Sector e. Credit of ITC • Strategic f. Creation of Business Control of Intelligence reports and Govt Analytics g. Both Central and States Tax Departments

GSTN’s Structure 1. Goods and Services Tax Network (GSTN) is a Section 25 (non profit), non. Government, Private Limited Company. It was incorporated on March 28, 2013. a) 49% shareholding with Government (24. 5 % central government and 24. 5% with all states put together) b) 51% shareholding with private financial institutions where no one can have more than 11%

Salient Features of GSTN a. Exclusive national agency responsible for delivering integrated Indirect Tax related services involving multiple tax authorities b. Provide common Registration, Return filing and e-Payment services to the taxpayers c. Ensure integration of the GST Common Portal with existing tax administration systems of Central / State Governments and other stakeholders d. To run the clearing-house mechanism for IGST amongst centre and states e. Provide Analytics and Business Intelligence to tax authorities f. Carry out research, study best practices and provide training to the stakeholders

GST IT Strategy Autonomy of back-end systems of States and Centre Harmonization of Business Processes and Formats Common & Shared IT Infrastructure Registration Returns Payments • Helpdesk support • Information on Inter-State supply and cross-credit utilization • Analytics • IGST Settlement Statutory Functions – – – Non-Statutory Functions • Core Services Centre/States Tax IT Systems IT Interfaces Approval of Registration Assessment Refunds Audit and Enforcement Adjudication Internal workflows to support above functions • Recovery • Analytics and BI • • •

GST IT Strategy Tax Authority State / Centre Tax IT Systems Interface State/Centre Portal GSTN IT Systems Taxpayer GST Common Portal API Interface GST Ecosystem State/ Centre Application Accounting Agencies & Treasuries Common Portal Database State / Centre Database API Interface GST Application API Interface Network of Banks & RBI

GST Rollout Strategy State/CBEC to develop their own backend modules and exchange data with GST common portal using APIs over a secured network 1 Data enter APIs State 1 2 GST Common Portal + Backend System WAN Network State 2 State n 19 States/UTs

Model-1 and Model-2 States Sl. No. State/UT Sl. State No. Sl. No. State/UT Model-1 3 Himachal Pradesh 1 Andhra Pradesh 4 Punjab 16 Chattisgarh 2 Maharashtra 5 J&K 17 Gujarat 3 Goa 6 Puducherry 18 Rajasthan 4 Haryana 7 West Bengal 19 Uttar Pradesh 5 Karnataka 8 Arunachal Pradesh 20 Uttarakahand 6 Tamil Nadu 9 Assam 7 Kerala 10 Manipur 8 Meghalaya 11 Mizoram 9 Sikkim 12 Nagaland Model-2 13 Tripura 1 Telangana 14 Delhi 2 Orissa 15 Madhya Pradesh 21 Bihar 22 Jharkhand CBEC

Access of Officials of Model-1 to GST Portal • Since all information relating to registration, return, payment will be at IT System of CBEC/States, few will need access to GST Portal database • Officials of Enforcement, Vigilance, Senior officers will have full access • In case of related party details of other states, information will be provided on request. • Access to data of related taxpayers • BI and Fraud analytics support • Helpdesk and Training • Assurance of data from GST Systems • Single source of truth

Access of Officials of Model-2 to GST Portal • In addition to what is provided to officers of Model 1, the entire backend application covering following will be provided by GSTN. • • • • Approval of Registration Assessment (Scrutiny of Returns) and Adjudication Refund MIS/Reports Advance Ruling Appeal and Revision Policy/Admin Return Processing and Audit Recovery and Write Off/Demand & Collection Register (DCR) Enforcement and Survey Prosecution Analytics and BI User ID/Password management

GST System : Outline of Scope of Work for MSP Track I II IV V VI VII Scope of Work Application design, development and implementation Taxpayer one time Data Porting IT Infrastructure procurement, supply, installation and Info Security DC/DR Hosting Services including providing Bandwidth for the project Helpdesk Setup and Operations Training and Capacity Building Operations and Maintenance of the GST System for 5 years

Auditing and Logging • All Tax payer transactions will be logged and based on sensitivity (like return filling, payment etc. ) audit trail will be retained. • Tax Payer Activities on portal will be logged to improve user experience. • All login attempts success/failure will be logged for monitoring to prevent misuse and hacking of accounts. • All important/sensitive actions of tax officials will be logged like downloading of Tax payer details, Searching of patterns which are throwing large result set to prevent misuse of system. • All access to database will be logged and monitored • All changes made to system like creation of new user, change in privileges etc. will be logged and monitored. • All digitally signed data will be stored for any dispute.

Information Classification Level Description Examples Level 1 (Public) Information that is available to (i) GST web public content all GST system users without (ii) GSTIN, Status, Name any restrictions Level 2 (Internal) Information is available to only (i) Configuration parameters a sub-set of internal users from (ii) Rules GSTN & SP (iii) Application Logs etc. Level 3 Level 2 restrictions plus (Confidential) Information is sensitive needs to be protected through Encryption or through other data masking techniques (i) Sensitive data and personal information (Bank account details, PAN, Aadhar number) (ii) Personal information such as Mobile number, Address, Email id (iii) Invoice data, Tax returns details, Ledger entries Level 4 (Secret) (i) Passwords (ii) Digital signature, Encryption keys (iii) Highly confidential Govt communication Information that available to only very few (1 or 2) users.

Information Security Dimensions • Confidentiality – Ensure Data is only visible to intended personal – Controls: Anonymization, Encryption, RBAC • Data Protection – Ensure data can only be modified by people who are authorized – Controls: Database Activity Monitoring, Encryption • Integrity & Non-Repudiation – Design system to detect any unauthorized changes to the data – Controls: Encrypted Checksum, PKI based Digital Signatures • Recoverability – Design the system with ability Reconstruct the Truth

Integrity – Non-repudiation Approach • PKI based Digital Signature will be mandated for all Medium - large tax payers – GST System will mandate PKI based Digital Signature for all filing of statutory forms (Returns, Refunds, Registrations etc. ) – Signing using Class-2 or Class-3 Certificate – Additionally, GST System will also support e-Sign • Electronic Verification Code (EVC) based approach for non- repudiation will be allowed for small Tax Payers (Similar to Income Tax)

Process Overview - Registration • • PAN based common registration State-specific registration. Multiple registration in one State also possible in selected cases No physical submission of application No pre-registration site visit by Inspectors Post site visit by Inspector only in specific cases based on risk parameters Time limit prescribed for approval by Registering Authority Approval for amendment only if changes are w. r. to Core details : Name of business entity, Principal place of business, Details of proprietors/partners/karta/MD, Compounding scheme • • • Auto prefill of maximum fields in case of additional registration or any other registration Approval from Central & State Registering Authority required Central or State Authorities have power to cancel registration Submission of Form through TRPs and FCs as well as offline utility Status tracking 17 Auto migration of existing taxpayers to the GST system

Ways to Register Registration Migration from earlier regime Self Registration through GST Portal New Registrations Registration Through TRP 18

Process Overview - Payments • • • Single challan for CGST, SGST, IGST and Additional Tax. All payments can be done through one challan Challan to include all major heads (IGST, CGST, SGST, Additional Tax) and minor heads (Tax, Interest, Penalty, Fine, Others) Payment through Debit/Credit Card, Internet Banking, NEFT/RTGS and at the Bank Counter Facility to make advance payments All payments will become part of Cash Ledger and can be utilized in payment of liabilities Maximum Time limit prescribed for making payment if challan generated • • Prefilled Challan except for amounts Facility to make payments under different major/minor heads within one challan Refund can be claimed for excess payments Facility to track payment Facility to link UTR in case of NEFT/RTGS Facility to generate challan with pay later option is also available 19 Payment can be made through un-associated banks also via NEFT and RTGS

Process Overview - Returns • • • Uploading of only outward supplies. Invoice-wise, HSN/SAC Code wise filing of outward supplies Facility for Buyer to add invoices missed by supplier for claiming Input tax credit No Duplication of details of Invoice will be allowed Validation on GSTIN of Buyers and Sellers and Validation of the Import/Export data from CBEC & DGFT systems. • • Uploading of invoice details in phased manner Auto generation of purchase details based on Outward supply returns filed by vendor Facility to file corrections in subsequent returns till filing or due date of filing Annual Return for the year Auto creation of Monthly Return based on Invoice details uploaded through GSTR 1 or GSTR-2 Facility to file returns through TRPs and FCs Facility to file using offline utility and GSPs. For any mistake error message will be displayed. 20 Tax Ledgers (Liability, ITC and Cash) available for summarized and detailed view

Returns Forms Overview 2 1 5. B 2 B 6. B 2 C Large 7. B 2 C Small 8. Credit/Debit Note 9. Amendment s 10. Nil Rated 11. Exports 12. AT Liability 13. AT Paid GSTR-1 (Outward Supplies) 4. B 2 B 5. Import Goods 6. Import Services 7. Credit/Debit Note 8. Amendments 9. Nil Rated 10. ISD Credit 11. TDS Credit 12. Partial Credit GSTR-2 (Inward Supplies) 5. Turnover 6. Outward Supplies 7. Inward Supplies 8. Total Liability 9. TDS Credit 10. ITC Credit 11. Tax Paid 12. Refund Claim 4. B 2 B 5. ISD Distribut ion 6. ISD Ledger 4. TDS Details 5. Other Amount Paid GSTR-3 (Monthly Returns) GSTR-6 (ISD Distribution) GSTR-7 (TDS Details)

Filing of Monthly Returns by Taxpayer 2 Taxpayer 1 GSTR-1 (Return of Outward Supplies) (Missed Invoice Added) GSTR-1 (Return of Outward Supplie s) GSTR-2 (Return of Inward Supplies) GSTR 3(Monthly Return) The details filed via GSTR-1 and GSTR-2 will be auto-populated in GSTR-3

Creation and Discharge of liability arising out of Return • • • On filing GSTR-1 the liability on account of Outward supplies shall be auto-populated in Tax liability Ledger. On filing GSTR-2 the liability on account of Reverse charge shall be auto-populated in Tax liability ledger and the Input tax credit shall be auto-populated in ITC ledger. Valid GSTR-3 shall be allowed to be submitted only when complete tax liability w. r. to the corresponding tax period has been discharged by the taxpayer. The liability can be discharged either from the Cash ledger or ITC ledger based on availability of credit. The liability for the corresponding tax period can be discharged either before or at the time of filing GSTR-3. Tax liability ledger GSTR-1 (Return of Outward Supplie s) Input Tax Credit (ITC) ledger Cash ledger GSTR-2 (Return of Inward Supplies) GSTR 3(Monthly Return) 23

Thank You