GST on GSTN
OCTOBER 09, 2015
By S Maheswaran, B.Sc., B.L., Superintendent of Central Excise, Chennai
GSTN is a Section 25 (not for profit), non-Government, private limited company. It was incorporated on March 28, 2013. The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-Government financial institutions. The Company GSTN has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST).
It is learnt that Infosys Ltd has been awarded a contract worth Rs.1,380 crores to build and maintain the technology network crucial for implementing the proposed Goods and Services Tax (GST) system across the country for five years. They have to pay service tax and thereafter GST on the contract amount at the applicable rates.
Cabinet had approved a self-sustaining revenue model wherein GSTN will levy user charges on tax-payers and tax authorities availing GST services. But after discussions in the Empowered Committee (EC) it was suggested that GSTN should derive its revenue from the payment of user charges by Central and State governments respectively. From the above it is clear that GSTN would be serving the Central and State governments and receive payment of user charges from them. Now the question arises whether GSTN has to pay the GST for the user charges received from Central and State governments in post GST era?
At present, in service tax there is no exemption for a company like GSTN providing IT infrastructure services to Central and State governments from payment of service tax as seen from the section 66D (Negative list) of the Finance Act. Further, the mega exemption Notification No. 25/2012-ST dated 20.06.12 does not provide any exemption for the same. Unless the Central government provides exemption from payment of GST by GSTN, the services provided by GSTN will be taxable under GST.
Then what type of GST, the GSTN has to pay? GSTN is having their Registered Office as well as Corporate Office at New Delhi. Since GSTN is going to provide services to the Central/State governments and Union territories throughout the country and hence they have to pay CGST, SGST and IGST depending upon the States/Union Territories to which the services are provided. However they are eligible to avail credit on the GST paid by the Infosys Ltd who provide the input services to GSTN.
Lets start at the start!
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