Reetu | May 22, 2023 |
GSTNs platform to allow small firms to permit lenders to access their tax records live by July 1
The Goods and Services Tax Network (GSTN), which serves as the technical interface between the government and taxpayers, is expected to be merged with the country’s ambitious financial data sharing network, Account Aggregator, by July 1, according to top authorities managing the project.
This would allow small firms to permit lenders to access their tax records as well as other financial information on a single platform, which will greatly decrease friction in credit disbursement. The GSTN tax network has about 1.4 crore registered taxpayers.
In answer to questions about the development, GSTN officials indicated the network will be live on the AA system before July 1, but not exactly when.
According to Finance Ministry officials, banks and lenders can use GST filings as a financial statement to analyse small firms’ financial health.
“This will help in the seamless sharing of taxpayers’ account information and will help them save paperwork by allowing lenders to easily pull-out data from GST returns along with their savings, pension account, and other aggregators,” they noted.
It will also help them “use the data to arrive at the correct tax assessment and will improve scrutiny,” according to authorities.
GSTN was included as a financial information provider under the account aggregator framework by the Reserve Bank of India in November to promote cash flow-based lending to micro, small, and medium-sized companies (MSMEs).
An account aggregator often facilitates data sharing between people and financial organisations. Lenders can analyse this information without having to rely on several sources before making a loan to an individual or an organisation.
The AA system began with the participation of eight of India’s top institutions, including the State Bank of India, ICICI Bank, and HDFC Bank, among others. Those who were granted licences to become account aggregators were then able to obtain information from the registered banks. Licensees believe that GSTN joining the AA network considerably improves creditworthiness and evaluation of all micro and small firms.
A senior official at NESL Asset Data Limited (NADL), another account aggregator on the network, stated that when the bank wishes to make loans based on the GST, the taxpayer’s digital lending trip would be considerably easier.
“Currently, the taxpayer must physically provide the GST details, which is a time-consuming process. With a single click and an OTP onboarding, all of his GST details are directly downloaded to the lending institution, ensuring total transparency and straight from the source,” the individual added. “The journey is much easier for MSMEs seeking credit,” he remarked.
Banks, non-banking financial enterprises, asset management firms, depository, depository participants, insurance companies, and pension funds are among the financial information providers listed in the AA network.
“The Department of Revenue shall be the GSTN’s regulator for this specific purpose, and Goods and Services Tax (GST) Returns, viz. Form GSTR-1 and Form GSTR-3B, shall be the financial information,” the Reserve Bank stated in a circular last year.
Infosys and Wipro, two Bengaluru-based IT services companies that are India’s second and fourth largest IT corporations, respectively, have been collaborating with the GSTN as technological service providers.
The two corporations did not comment by press time when asked if they were permitting the GSTN to go online on AA and if there was a delay.
Source: Economic Times
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