GST India: Open API approach

It strategy is at the core of system design for GST and the approach taken is to provide open APIs for integration by third party vendors. Taxpayers are expected to interact with GST system using applications developed by third party vendors (Desktop or app or browser based) which would be device agnostic (PC, Mobile, Tablet, etc.). Third party Accounting/ERP solutions or apps would integrate with GST system using secure APIs based on OAuth 2.0 specifications.  A minimalistic G2B portal will also be available for taxpayers for manual interaction.

By adopting an hourglass architecture GST system aims to act as a platform and thereby encourage development of a vibrant GST ecosystem. Various stakeholders like the taxpayers, Central and State tax departments, Banks, Payment solutions etc.,  would thus be able to connect to GST system using alternate apps, web portals and interfaces built by third parties. API based platform architecture would enable automation, divert load from G2B portal besides providing ease of use. Existing accounting-cum-ERP packages would be able to easily integrate thus enabling the taxpayers already using such solutions.

GSTN Architecture:

Advantages of API approach:

1.      Taxpayer perspective:

A taxpayer would gain from the plethora of choices in terms of ERP or Accounting software applications and interfaces available across devices. For users of existing solutions, integration with GSTN would drive ease of use and adaptability. Taxpayer may use one or more of the solutions available in market to suit his requirements without depending on sole G2B portal for interactions. Commercial (pricing) of products would also be competitive due to development of healthy ecosystem.

2.      Novelty:

Private sector enterprises would innovate and bring in novel solutions in areas of application development (online-offline), scope (return filing, payments, registration etc.), interfaces, multiple device capabilities and device integration (POS, micro-ATM, DSC dongle etc.).

3.      Change management:

GSTN by acting as a platform would be in a better position to handle changes related to tax laws, changes to backend systems and thereby implement changes without affecting the external stakeholders. This is in comparison to GSTN acting as a provider of a monolithic, fully integrated interface wherein any change implementation would necessitate each dependent to make necessary modifications at his end.

4.      Others:

Individual APIs are easy to manage, deploy, modify and version rather than making changes to entire application. And with the kind of scale anticipated (over 3 Billion invoices to be uploaded every month by 80 Lakh+ dealers across India), APIs allow for load to be distributed away from G2B portal towards third party applications. APIs provide for data structure validation and avoid duplication thereby assist in maintaining single source of truthful data. Security concerns are also addressed by usage of encapsulation, encryption, user credentials and digital signatures. As GSTN aims to be self-sufficient in terms of revenue, it is simpler to charge users as per API consumption patterns.

By envisioning GST system as a platform, the architects of the system have paved way for a futuristic model which is not available even in developed countries. Development of a robust eco-system of application and infrastructure providers is inherent to the design. A number of stakeholders (Tax authorities, Tax payers, Central & State governments, Banks, Payment gateways, wallets, DSC / e-sign providers, apps / ERP firms etc.) are likely to benefit hugely from this approach.

(Views expressed are strictly personal)