Geocoding is a process that involves converting a physical address into geographic coordinates, namely latitude and longitude. This technology has been adopted by several countries for taxation purposes, including the United States, the United Kingdom, Canada, and Brazil. In India, the Goods and Services Tax Network (GSTN), the technology backbone of the GST system, has recently introduced a geocoding feature on its portal. This article will explore how geocoding works and the benefits it brings to taxpayers in India.
Accurate address details play a crucial role in determining the applicable GST rates, place of supply rules, and compliance requirements. With the introduction of geocoding, the GSTN aims to streamline the address location and verification process. This will help ensure the accuracy of address details in GSTN records, making the process more efficient and accurate.
The geocoding feature is available on the GSTN's FO portal. Taxpayers can access and update their geocoded addresses by going to the "Services/Registration" tab on the FO portal. If the system-generated geocoded address is not available for a particular taxpayer, the system will display a blank space, allowing the taxpayer to directly update the geocoded address. Once a taxpayer has accepted or updated their geocoded address, the new information will be saved separately under the "Principal Geocoded" tab.
Updating the geocoded address details on the FO portal is a one-time activity. It will not change any existing addresses that are associated with the taxpayer’s account. Instead, it provides an additional piece of information that can be used for tax purposes, helping to ensure that the taxpayer’s location is correctly recorded.
The geocoding feature is currently available for various types of taxpayers, including normal taxpayers, composition taxpayers, SEZ units, SEZ developers, Input Service Distributors (ISDs), and casual taxpayers. It is available for taxpayers who are currently active, cancelled, or suspended. The functionality is being rolled out in phases, and as of now, it is only available to taxpayers registered in Delhi and Haryana. However, it is expected to become a fully functional module integrated into the GSTN within a year or two.
Geocoding brings several benefits to taxpayers in India. By providing accurate address details, it helps them comply with GST regulations and avoid penalties for non-compliance. It also makes the address verification process more efficient, reducing the time and effort required to update address details. Additionally, the geocoding feature is easy to access and use, providing taxpayers with a convenient way to update their geocoded addresses.
Geocoding is an important component of digitalization in tax technologies. It helps improve accuracy and transparency, making it easier for tax authorities to identify and prevent tax evasion. In India, efforts are being made to improve geocoding capabilities in areas with limited technological infrastructure through various digital initiatives. Corporate laws in India already implement geocoding, and it is likely that both ministries will share seamless data in the future.
Geocoding is a powerful tool that brings several benefits to taxpayers in India. The introduction of geocoding functionality on the GST Portal is a step in the right direction for taxpayers and the Indian tax system as a whole. By allowing taxpayers to geocode their principal place of business address, the GSTN is helping to ensure the accuracy of address details in GSTN records and streamline the address location and verification process. This will not only help in determining the applicable GST rates, place of supply rules, and other compliance requirements, but also improve overall efficiency and transparency in tax collection.
Furthermore, as the use of digital technologies continues to grow in India, efforts to improve geocoding capabilities in areas with limited technological infrastructure will become increasingly important. The widespread adoption of geocoding across India could significantly enhance tax compliance and help to reduce tax evasion. As such, it is important for the government and private sector to work together to further develop and implement digital initiatives like geocoding in the Indian tax system.
Overall, geocoding is an innovative solution to the challenge of accurate and efficient address verification in the Indian tax system. It has the potential to improve transparency, reduce errors, and increase tax compliance. While its implementation is still in its early stages, it is an exciting development that holds great promise for the future of taxation in India.
What is GSTN (Goods and Service Tax Network)
GST Rate HSN Code for Services - Chapter 99
GST on Third-Party Exports: Impact on Small and Medium Enterprises