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Business News/ Politics / Policy/  GST Network to encrypt companies’ data to check leaks
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GST Network to encrypt companies’ data to check leaks

Data security is of prime importance, says GSTN chief executive Prakash Kumar

GSTN chief executive officer Prakash Kumar. Photo: PTIPremium
GSTN chief executive officer Prakash Kumar. Photo: PTI

New Delhi: Goods and Services Tax Network (GSTN), the company that will pore through millions of invoices daily to ensure that the tax applied on transactions is limited to the value added at that stage, will encrypt the data submitted by businesses and have firewalls to prevent leaks.

Data security is of prime importance, GSTN chief executive Prakash Kumar said at a conference organized by industry chamber Assocham on Tuesday.

Information relating to cost incurred by a company, for example energy or raw material cost, are key to its competitiveness and are closely guarded. Companies conduct cost audits for assessing their competitiveness, although it is no longer a statutory requirement in a market economy, unlike financial audit.

ALSO READ : Taxpayers to be rated on GST compliance

“In the invoice, cost details are also included. We recognize that if your competitor comes to know of it, it will be a big setback for you. So, all the data that will come to us, will be encrypted and the best possible security system will be provided," Kumar said.

He added that only two people will have access to data—the taxpayer himself and his assessing officer. The same data will be stored at four different locations to safeguard it, said Kumar.

GSTN is a private, not-for profit company in which the central government and states and Union territories together hold 49%. The rest is owned by financial institutions. During the debate on four GST bills in Rajya Sabha last week, Bharatiya Janata Party MP Subramanian Swamy raised the demand for an audit of GSTN by the Comptroller and Auditor General of India (CAG) as the private company will be the cyber brain of the proposed indirect tax reform. To a query on this demand, Kumar said it was an issue on which only the government could comment.

ALSO READ : GST rollout on 1 July likely as Rajya Sabha clears bills

About 5.65 million taxpayers out of an estimated 8 million excise, service tax and value-added tax assessees have so far joined the GST Network website which is expected to handle about 3 billion invoices a month. GSTN will mobilize working capital by levying a user fee on state governments for its services.

GST is expected to be rolled out from 1 July, subsuming all indirect taxes except basic customs duty, paving the way for a single national market. The rules of the new indirect tax system are mostly ready and tax rates are expected to be decided in May.

Experts said businesses have limited time to gear up for the transition. “Since it is now reaffirmed that GST is going to take off from 1 July, it is essential businesses get prepared on a war footing. A process-based systematic approach by businesses is the need of the hour," said M.S. Mani, senior director, Deloitte Haskins & Sells LLP.

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ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
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Published: 12 Apr 2017, 12:24 AM IST
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