GSP Workshop

Concept and Strategy

25th October 2016

The Statistics on Applications Received

No. Item
1.

Total number of Applications filed by 21st Oct 2016

2.

Break-up
For GSP
For Non-GSP

Total number of applicants out of 340 which fulfil all 3

pre-qualification conditions

Number
340*
293
47
98

* Note: As per applications and data submitted by the applicants

Capital and Turnover, if reduced in multiple of 20% (by 1 crore of capital
and 2 crores of Average turnover) then estimated number of applications:

If capital >= 4 Cr and Avg Turnover >= 8 Cr

If capital >= 3 Cr and Avg Turnover >= 6 Cr
If capital >= 2 Cr and Avg Turnover >= 4 Cr
If capital >= 1 Cr and Avg Turnover >= 2 Cr

103
103
119
166

The Rationale for GSP

The GST System will have a G2B portal for taxpayers to access the GST
System. But there will be wide variety of tax payers who will require
different kind of facilities like converting their purchase/sales register data
in GST compliant format, integration of their Accounting Packages/ERP
with GST System etc.
GST System will not be able to solve all these problem itself. So an ecosystem will be required, which can help the taxpayers in GST compliance.
Taxpayers convenience will be a key in success of GST regime and he
should have a choice to use other third party applications, which can
provide different kind of interfaces on desktop and mobile and could help
comply with GST requirements.
Large organization will require a automated way to interact with GST
system as it will be practically impossible for them to upload large number
of invoices through a web portal.
All above reasons require an eco system of third party service providers,
who have capability to develop such applications. These service providers
have been given a generic name, GST Suvidha Provider or GSP.

The Rationale for GSP

Attempt is to create Eco-System consisting of

GSP
Application Providers
Tax Accounting software companies
Invoice generation companies with matching engine
Companies which will enable accounting software
companies to comply with GST Requirements,
Training providers on GST, etc.

We need all kinds of players and not only

GSPs

The GSP Eco-System

Room for different kinds of players
All components of eco-system are important
The preliminary qualification is to ensure that
agencies selected are having demonstrable
experience to start with.
GSTNs ability to handle number of applicants is also
a factor
PQ is not cast in stone and will be reduced gradually
to bring more GSPs in the eco-system
More GSPs from those who have registered for GSP
will be considered following the same technical
evaluation system

The GSP Eco-System

Becoming a GSP is not like getting a license under license raj. It will
our endeavour to have more and more GSPs and then allow market
forces to determine the viability. Like UIDAI, we will also grow the
eco-system including GSPs.
Relationship between GSPs and other application providers will be
controlled thru contract GSPs will sign with GSTN and they will be
closely monitored to
Ensure that No cartels are formed
Ensure GSPs provide access to any application provider without any
discrimination and predatory pricing

Any complaint from non-GSP partner, if found correct, will lead to

immediate cancellation of contract of relevant GSP.
Continuous evaluation of GSPs will be done in the initial period
Data collected from GST System shall not be misused or used for
any commercial purpose.

Issues Raised
1. Stiff Eligibility criteria
How can a start up meet such criteria of rs 5 crore of
paid up capital and 10 crore of average turnover for
last 3 years?
How can a smaller player become GSP?
Should this not be based on merit and openness?
Reply: As explained on previous slides

Issues Raised
2. GSTN should give out two types of GSP
agreements - Class S and Class R.
Reply: GSTN will not monitor hundreds of ASPs
or Sub-GSPs

Issues Raised
3. Integration with Payment Gateways for GSPs
Reply: Payment only through GST Portal and
then to Bank or their payment gateways as
approved by RBI.

Issues Raised
4. "Allowing of ASP or Sub-GSP" as a mandatory control in place,
failing which GSP license should not be awarded.
* Mandate the GSP to issue Sub GSP Licences.
* There should be a sandbox for ASP-GSP-GSTN scenario in
place
* This sandbox should be mandated of GSPs, as part of their
evaluation to be considered for GSP
* The GSP should be able to demonstrate the API Access to
third Party ASP
There should also be a redressal mechanism in place for ASPs
to be able to voice out concerns.
Reply: Already included

Issues Raised
5. Can new entity be allowed to become GSP on the
strength of group company?
Reply: No, it cannot be done.

Thanks