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The Goods and Services Tax (GST) system is not exposed directly to the Internet and has a dedicated round-the-clock security operations command centre in its network against cyber-threats. To a question in RajyaSabha, the government said that any interaction with the system was only through APIs (application programming interfaces). It had multi-layered security architecture and had operational segregation through use of a virtual local area network.

Access privileges

There was segregation of duties, least privilege access principles, Internet Protocol (IP) filtering and blocking of rogue IPs, resiliency at each layer, secure coding practices ensuring security of GST software development throughout Software Development Lifecycle, and at-rest and in-transit data encryption, the government said.

The data sharing mechanism ensures that any data transfer from the GST system is in encrypted format. The system banks on thorough security testing and full-system vulnerability assessment and penetration testing of IT infrastructure, besides the apps used licensed tools and customised scripts, said the government.

Security incidents

According to the Indian Computer Emergency Response Team (CERT-In), a total of 44,679, 49,455, 50,362 and 27,482 cybersecurity incidents were observed during 2014, 2015, 2016 and 2017 (till June), respectively, the government said in response to another query.

The types of cybersecurity incidents include phishing, scanning/probing, website intrusions and defacements, virus/malicious code, targeted attacks, ATM malware, ransomware and denial of service attacks among other threats.

The government had taken a series of measures to strengthen the cybersecurity infrastructure. All financial institutions had been advised by CERT-In, through the Reserve Bank of India (RBI) to conduct an audit by empanelled auditors on a priority basis and take immediate steps accordingly.

Crisis plan

All organisations providing digital payment services have been mandated to report cyber security incidents to CERT-In expeditiously. The government has also formulated a Cyber Crisis Management Plan for countering cyber attacks for implementation by all ministries and departments.

What is GST

GST is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes. Goods & Services Tax is a comprehensive, multi-stage, destination-based tax that will be levied on value additionat each stage of the production cycle - buying raw materials, processing, manufacturing, warehousing and sale to customers. The monetary worth added at each stage to achieve the final sale to the end customer will be taxed. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.

Consider goods manufactured in Rajasthan and are sold to the final consumer in Karnataka. Since Goods & Service Tax (GST) is levied at the point of consumption, the entire tax revenue will go to Karnataka.Before GST, tax on tax was calculated and tax was paid by every purchaser including the final consumer. The taxation on tax is called the Cascading Effect of Taxes. GST avoids this cascading effect as tax is calculated only on the value add at each transfer of ownership.

GST would apply to all goods other than crude petroleum, motor spirit, diesel, aviation turbine fuel and natural gas. With the increase of international trade in services, GST has become a global standard. GST will ensure that indirect tax rates and structures are common across India and increase the ease of doing business. This would make doing business in the country tax neutral, irrespective of the choice of place of doing business.

Keeping in mind the federal structure of India, there will be two components of GST – Central GST (CGST) and State GST (SGST). Both Centre and States will simultaneously levy GST across the value chain. Tax will be levied on every supply of goods and services. Centre would levy and collect Central Goods and Services Tax (CGST), and States would levy and collect the State Goods and Services Tax (SGST) on all transactions within a State. The input tax credit of CGST would be available for discharging the CGST liability on the output at each stage. Similarly, the credit of SGST paid on inputs would be allowed for paying the SGST on output. No cross utilization of credit would be permitted.

Source: The Hindu, Times of India