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GSTN Shares Data with RBI for Credit Scheme | LogiTax
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GSTN Shares Data with RBI for Credit Scheme

11-03-2024
GST
Mrudula Joshi

GST Registration within 30 Days for Risk-Based Profiles

On 22nd of February, 2024, CBIC issued Notification No. 06/2024 - Central Tax. By way of this notification, CBIC has stated that it has notified “Public Tech Platform for Frictionless Credit” as the system with which the common portal may share information.

Let's understand this announcement in detail!

What is a “Public Tech Platform for Frictionless Credit”?

With rapid progress in digitalization, India has embraced the concept of digital public infrastructure which encourages banks, NBFCs, FinTech companies, and start-ups to create and provide innovative solutions in payments, credit, and other financial activities. For digital credit delivery, the data required for credit appraisal are available with different entities like Central and State governments, account aggregators, banks, credit information companies, digital identity authorities, etc. However, they are in separate systems, creating hindrances in the frictionless and timely delivery of rule-based lending.

“The Public Tech Platform for Frictionless Credit” is a platform that would enable the delivery of frictionless credit by facilitating a seamless flow of required digital information to lenders. The end-to-end digital platform will have an open architecture, open Application Programming Interfaces (APIs), and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model.

The platform, created by the Reserve Bank of India (RBI) subsidiary Reserve Bank Innovation Hub, is intended to enable a seamless flow of necessary information to lenders to help in disbursing credit.

The financial service providers and multiple data service providers can converge on the platform using standard and protocol-driven architecture.

The Public Tech Platform for Seamless Credit Integration will systematically aggregate data from diverse agencies, presenting it in a format and method tailored for lenders on the platform to facilitate informed credit decisions. This streamlined process will significantly diminish operational timelines, fostering increased opportunities for borrowing and lending.

Notification No. 06/2024- Central Tax

Following are the wordings of the Notification No. 06/2024 – Central Tax dated 22nd of February, 2024:

S.O. 818(E).—In exercise of the powers conferred by section 158A of the Central Goods and Services Tax Act, 2017 (12 of 2017) and section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby notifies “Public Tech Platform for Frictionless Credit” as the system with which the common portal may share information based on consent under sub-section (2) of Section 158A of the Central Goods and Services Tax Act, 2017 (12 of 2017).

Explanation.— For this notification, “Public Tech Platform for Frictionless Credit” means an enterprise-grade open architecture information technology platform, conceptualized by the Reserve Bank of India as part of its “Statement on Developmental and Regulatory Policies” dated the 10th August 2023 and developed by its wholly owned subsidiary, Reserve Bank Innovation Hub, for the operations of a large ecosystem of credit, to ensure access of information from various data sources digitally and where the financial service providers and multiple data service providers converge on the platform using standard and protocol-driven architecture, open and shared Application Programming Interface (API) framework.

[F. No. CBIC-20001/1/2024-GST]

What is rule 158A of CGST Rules, 2017?

Rule 158A covers provisions relating to Consent-based sharing of information furnished by taxable persons.

The text of this rule is as follows:

  1. “The following details furnished by a registered person may be shared by the common portal with such other systems as may be notified by the Government, in such manner and subject to such conditions as may be prescribed, namely:-
    1. particulars furnished in the application for registration;
    2. the particulars uploaded on the common portal for preparation of invoice, the details of outward supplies furnished, and the particulars uploaded on the common portal for generation of documents under section 68;
    3. such other details as may be prescribed.
  2. To share details under sub-section (1), the consent shall be obtained, of-
    1. the supplier, in respect of details furnished under clauses (a), (b) and (c) of sub-section (1); and
    2. the recipient, in respect of details furnished under clause (b) of sub-section (1), and under clause
    3. of sub-section (1) only where such details include identity information of the recipient, in such form and manner as may be prescribed.
  3. Notwithstanding anything contained in any law for the time being in force, no action shall lie against the Government or the common portal for any liability arising consequent to information shared under this section and there shall be no impact on the liability to pay tax on the relevant supply or as per the relevant return.”
    As per this rule, GSTN can share information of taxpayers, which may be obtained by it from GST registration application / certificate or filing of GST returns or any other details, with “other systems”. “Other systems” will be notified by the Government from time to time. For such sharing, consent of the taxpayer /recipient is required to be taken by GSTN.

Summary of the Notification No.06/2024- Central Tax

By way of this notification, CBIC has notified the “Public Tech Platform for Frictionless Credit” platform as the system with which the common portal may share information. It means GSTN may share information of the taxpayer with the “Public Tech Platform for Frictionless Credit” platform by obtaining the consent of the taxpayer.

With explicit consent from the taxpayer/recipient, the Goods and Services Tax Network (GSTN) is authorized to disclose precise details provided in the GST registration application, data derived from outward tax returns, monthly and annual tax returns, as well as invoice preparations.

Conclusion

This framework guarantees that borrowers cannot withhold any transactional information shared with lenders or the government portal. It optimizes credit efficiency by reducing costs and streamlining the processing time required for transactions. Furthermore, lenders are granted access to verified monthly sales and purchase data directly sourced from government-approved channels, enabling a more precise and timely credit risk evaluation. GST filings will emerge as a pivotal determinant for businesses aspiring to secure credit and capitalize on government-backed credit programs in the future.

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