A common GST system will provide linkage to all State/UT Commercial Tax departments Like- Customs, Income Tax departments, Central Tax authorities, Taxpayers, Banks, RBI and other stakeholders. The eco-system of GST consists of all stakeholders starting from taxpayer to tax professional to tax officials to GSTN (GST portal- https://www.gst.gov.in) to Banks to accounting authorities. The diagram given here depicts the whole GST eco-system. The GST System is being developed by Infosys, provisioning of required IT infrastructure to host the GST System and running and operating the system for five years.
To understand and paying GST, the taxpayer will need tools for uploading invoice information, matching of input tax credit (ITC) claims, creation of party-wise ledgers, uploading of returns, payment of taxes, signing of such document with digital signature etc. The GST System will 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. Taxpayers will interface with GST System via GSTN provided by way of applications for activities such as Registration, Tax payments, Returns filing and other information exchange with GST core system.
Benefits of GSTN (GST Network) System:
- E-Challan for all payment from GSTN over manual challan
- Convenience and hassle free of making payment online
- Logical tax collection data in electronic format
- avoid middle authorities and a faster payment of tax to the Government Account
- Paperless transactions
- Speedy Accounting and reporting
- Electronic reconciliation of all receipts
- Simplified procedure for banks
- Warehousing of Digital Challan
- Easily monitoring over the tax payments
The following are the taxes which will be replaced by GST:
(1) Taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of goods and services
(2) State taxes that would be subsumed under the GST:
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and services
Taxes subsumed would be categorized either in form of supply of goods or supply of services. This should result in free flow of tax credit in intra and inter-state levels. Revenue fairness for both the unions and states individually need to be attempted.
Out of purview of GST:
Alcohol for human consumption,
Petroleum Products viz. petroleum crude,
motor spirit (petrol),
high speed diesel,
natural gas and aviation turbine fuel& Electricity
Benefits of GST
- Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market.
- For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%.
Introduction of GST would also make our products competitive in the domestic and international markets.
- Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved 10 11 tax compliance.
- Last but not the least, this tax, because of its transparent character, would be easier to administer.