Meaning of GST Suvidha Provider (GSP)

Posted on 10 June 2022 Category : GST terms

Term GST Suvidha Provider (GSP) under GST

The details about GST Suvidha Provider (GSP) are explained here

GST Suvidha Provider (GSP)

GSPs are the special entities who have been authorized to develop a platform to enable the taxpayer to do the GST compliances. GST is biggest tax reform in Indian history. All GST system functionalities like registration, return filing, payment of taxes, uploading of invoices will be available through APIs. All return filings under GST will be managed by GSTN.

The GST Regime in India is backed by the Goods and Services Tax Network (GSTN), a centralised IT infrastructure to handle all aspects of GST administration in India. Goods and Services Tax Network (GSTN) has been setup as a not for profit, Section 8 company that was incorporated on March 28, 2013. In the GSTN, the Government of India holds 24.5% equity 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. GSTN has been primarily tasked with providing IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders. To enable easy adoption of GST, GSTN has created a framework for providing GST Suvidha Provider (GSP) Licenses. In this article, we look at GST Suvidha Providers or GSPs in detail.

GST Suvidha Providers (GSPs)

To access the GSTN or GST System, GSTN provides GST Suvidha Provider License or GSP License to third parties who satisfy the eligibility criteria. GSPs would be able to create third-party applications and allow application service providers (ASPs) to create application in any interface, i.e., desktop, mobile, etc., with the ability to interact with the GST system. All third party applications must be designed to connect with GST system via secure GST System APIs. Thus the GSPs together with the ASPs are envisaged to provide innovative and convenient methods to taxpayers and other stakeholders in interacting with the GST Systems from registration of entity to uploading of invoice details to filing of returns.

GST Suvidha Provider (GSP) Eco-System

As shown in the illustration above, GSP providers are allowed to create GST application themselves or allow third-party application developers to access the GSTN through them. Also, taxpayers are free to choose an Application Providers or GSP of his/her choice, irrespective and independent to the other. Thus a taxpayer , can choose a set of services from one GSP and the rest from other GSPs. For example, a tax payer can obtain GST registration through one GSP or ASP, while filing GST return through another GSP or ASP.

GST Suvidha Provider (GSP) License – Eligibility Criteria

Companies registered in India in the Information Technology, Information Technology Enabled Services, Banking, Financial Services and Insurance sector are eligible for a GSP license. All GST Suvidha Provider applicants must meet strict eligibility criteria. GSP applicants meeting the eligibility will be required to sign a contract with GSTN to become an authorised GSP. On signing the contract, the GST Suvidha Provider is allocated an unique license key for accessing the GST system.

Eligibility Criteria 1:

The first set of GST Suvidha Providers were required to meet the following standards for obtaining GSP license:

Financial Strength

Paid up / Raised capital of at least Rs. 5 crores and
Average turnover of at least 10 Crores during last 3 financial years

Demonstration of Capabilities

Invoice upload by tax payers
GST Return #1 and #2 preparation and filing
Reconciliation of downloaded GSTR2 with Purchase Register
Multiple GSTIN Ids mapped to a single user account
Multiple roles mapped to single GSTIN
E-sign / DSC integration for signing of returns
UI / UX
Mobile interface
Alert generation to tax payers
Security design

Technical Capabilities

Backend infrastructure, such as servers, databases etc., required specifically for the purpose of GSP work shall be based in the territory of India, and
IT Infrastructure owned or outsourced to carry out minimum of 1 Lakh GST transaction per month, and
Data Privacy policy to protect beneficiary privacy, and
Data security measures as per the IT Act.

Eligibility Criteria 2

Following the onboarding of the first Batch of GST Suvidha Providers, the GSTN relaxed the eligibility criteria and invited the second batch. The revised eligibility criteria is as under:

Financial Strength

Paid up / Raised capital of at least Rs. 2 crores and
Average turnover of at least 5 Crores during last 3 financial years (2014-15, 2015-16, 2016-17)
- For FY 2016-17, unaudited results, duly authenticated by the Company Secretary only, may be quoted, to be followed up by the audited and signed balance sheets. For earlier years copy of relevant page of audited balance sheet needs to be shared.

Demonstration of Capabilities

Invoice upload by tax payers
GST Return #1 and #2 preparation and filing
Reconciliation of downloaded GSTR2 with Purchase Register
Multiple GSTIN Ids mapped to a single user account
Multiple roles mapped to single GSTIN
E-sign / DSC integration for signing of returns
UI / UX
Mobile interface
Alert generation to tax payers
Security design
Technical Capability of GSP (Handling Large Load, Experience in handling large application, Managing Sizable Application Infrastructure, Experience in developing complex application etc.)

Technical Capabilities

Backend infrastructure, such as servers, databases etc., required specifically for the purpose of GSP work shall be based in the territory of India, and
IT Infrastructure owned or outsourced to carry out minimum of 1 Lakh GST transaction per month, and
Data Privacy policy to protect beneficiary privacy, and
Data security measures as per the IT Act.

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