Tax automation under GST

Tax automation under GST


Senthil Kumar Subramanian

Senthil Kumar Subramanian

6 Jul 2017, 16:36 — 3 min read

The introduction of Goods and Services Tax (GST) in India, brings in a new regime of tax compliance, moving from filing of tax reports to a model based on data communication between you as the tax payer and the GST Network (GSTN) organisation. 

GSTN has introduced two new entities, GST Suvidha Provider (GSP) and the Application Service Provider (ASP), whose roles are to facilitate the data communication to the GST system at GSTN in the required format.

The tax data communication of the taxpayer to the GST system shall be routed from the ASP via the GSP. Through this process, the government proposes to collect details of Outward Supplies, ISD Details and GST deducted at Source (TDS) from each taxpayer.

On a monthly basis, the GST system collates the information at your organisation (GST registration) level and  provides you the  information on your  inward supplies. This information then forms the base for the determination of the Input Tax Credit that you can avail when determining the GST payable.  

The new process brings in a paradigm shift in the indirect tax determination in India with the source of truth for the input tax credit shifts from the taxpayer’s system to the GSTN system.

It now becomes imperative to have capability that shall help you collate the required information from multiple landscapes, facilitate activities like input credit reconciliation and provide the ability to communicate with the GST system. 

ASP & GSP Roles

The ASP provides enriched APIs like bulk uploading of invoices, offers conversion of invoice data into specified format (e.g.JSON), communicates with GST System via the GSP and offers value added services to the tax payer.

The contractual agreement of an ASP shall be with your organisation as a taxpayer and scope of services mutually decided between the ASP and you. Further, it is recommended that the ASP follows the same communication nomenclature  with GSP as that  followed by the GSP to GST system.

The GSP shall connect to the GSTN system through MPLS (Multiprotocol Label Switching lines), ensuring data security, data privacy and data integrity of the tax data flowing from the end user application to the GST system.

The GSP can additionally provide short as well as long duration sessions to their customers based on user preference.

GSTN identifies the GSPs and you may choose to connect with the GSP of your choice for the tax data communication services.

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