Why is Technology the Epicenter of GST Implementation?

By Registrationwala

25th April 2017


Technology assisted consistence as a whole, is not a recent notion in India. Route back in the 1990s, tax collection offices utilized innovation for administering tax. Nevertheless, this was predominantly used as a backend instrument. With the advent of filing of returns online, a noteworthy shift in conduct was witnessed. The shift was a result of various computer systems being integrated which in turn enabled the tax payers to directly communicate with the tax department.

Under the prevailing tax framework, information or data comprehensively flows in one course to the Government, which can be depicted as a B to G (Business to Government) data flow.  Usage of technology has fundamentally diminished the time and cost involved, at the same time enhancing the exactness of consistency enormously.

Now, the question that crops up is technology for GST compliance- what is the difference this time?

With technology a major thrust for consistency today, why’s there a need to revisit the issues concerning the correct technology for the implementation and execution of GST? Why would technology play a crucial role in GST execution and administration both from the government and the business perspective?

The government through the GST Model aims to achieve two major goals.

The above diagram depicts the objectives intended by the government to be achieved through GST Model.

Talking about the current tax system what boosted the need for a new tax structure like the GST draft are a number of loopholes. Instances like tax evasion and loss of tax revenues has been a major concern in the current tax system. There have been cases where the government failed to detect evasion and loss of tax revenues. This in turn has become a challenge for the concerned department to track the input claims against the seller’s labiality. Multifarious cases of duplication of claims on input tax, fraudulent claims, input claims not corresponding to the tax liability declared by the seller or the seller not furnishing his tax liability have been recorded.

In order to overcome this, GST has introduced invoice matching of buyer and seller. It has been estimated that on an average the tax payer base is 8 million under GST. With such an enormous amount of invoices to be matched on a monthly basis there is a dire need for a real time invoice matching capability which cannot be done without the support of a robust IT infrastructure.

Role of GSTN in order to simplify compliance for taxpayers:

The GSTN is as of now chipping away at taking off cutting edge IT infrastructure that will present changes that are altogether not the same as the present framework.

Outfitted with an open API (Application Program Interface), the GSTN server will seamlessly connect with third party applications used by taxpayers, thus administering an all-user interface, and convenience via desktops, mobiles, and tablets.  Henceforth, assisting taxpayers to automate their invoice matching from within their software instead of logging onto the portal which in turn will save time, and drive simplicity of compliance procedures.GST will drive a lot of discipline in filing returns at regular intervals, and automation will help businesses accomplish this with less sufferings.

Using technology will empower efficient tax administration for registration, returns filing, data exchange, and effective investigation, monitoring, auditing and performance analysis with little or no human intersession. Apart from this, it will also supply several user-friendly features such as offline capabilities, alerting capabilities, mobile/tablet interface, and additional mechanisms to ward off duplicity of data.

 Business are going to encounter several challenges at the initial stage of the implementation of the GST regime, since such kind of framework has been introduced for the first time in India as this tax system is being implemented for the first time in India.

On the other hand, once the systems are streamlined, the two important objectives contemplated – curbing tax evasion, and increasing tax revenue and ease of compliance for taxpayers will be achieved.

If the formulated draft transforms into success it would help our country establish history in the world of GST compliance.

What businesses need to do now is they must automate their manual systems and install software that is vigorous enough to interact with GSTN system and can assist in immediate accurate and reliable compliance. The GST regime beginning on 1st of July, 2017 aims on riding the strength of technology with seamless interface with the GSTN server.

Invoice matching is a critical precondition of GST. Compliance will no longer be a month-end or quarter-end activity due to the clear timelines stipulated by GST. Thus, invoice matching and other compliance pertinent activities cannot be accomplished using a manual or a low-tech system. Speed and accuracy are both critical.

Organizations should begin interfacing every now and again with the GSTN framework. This will require a GSTN-empowered business application or book-keeping programming so that the task ahead becomes seamless and efficient.

As a business, you ought to:

•        Start attempting to comprehend the effect of innovation on GST, and on your business

•        Appreciate the requirement for consistence teach

•        Focus on the correct decision of programming to help accomplish consistence


Why is Technology the Epicenter of GST Implementation?