goods and service tax

Published on 9 April 2025

Migration of CBIC to GSTN Back Office: Key Changes and Impact

Introduction

The Goods and Services Tax Network (GSTN) has successfully transitioned the Central Board of Indirect Taxes and Customs (CBIC) to the GSTN Back Office (GSTN BO) on June 1, 2024. The major transition is aimed at unifying tax administrations' processes, increasing operational efficiency, and enhancing taxpayer as well as tax officers' service delivery across India.

Scope of Migration

With this shift, the CBIC is now completely digital-enabled by the GSTN Back Office, which communicates with state tax administrations who already have gone in for this integrated digital platform. This shift substitutes the erstwhile Model 1 (individual CBIC back office) with Model 2 (one integrated back office for all tax officers under GSTN).

Objectives of the Transition

The central objective is to bring GST functions together into a single, end-to-end admin platform. It is to facilitate nation-wide uniformity, clarity, and further digitalization. The transition provides streamlined processes, improved data transfer, and stringent compliance regime.

Impact of GST Registration Applications

Temporary Assignment to State Tax Administrations

  • Transition Period: May 25 to May 31, 2024
  • Details: All new GST registration applications during this period were allocated to state tax departments instead of CBIC.
  • Purpose: It was undertaken to facilitate an uninterrupted migration along with continuous services as CBIC merged with GSTN Back Office.

Permanent Assignment of Taxpayers

  • Taxpayers whose cases are processed under the transition period will be permanently assigned to their state tax administrations.
  • Implication: State taxing agencies need to plan for persistent long-term growth of their taxpayer base and volume of registration, as opposed to fleeting, short-term growth.

Operational Guidelines for State Tax Departments

  • Manpower and Resources: Governments need to take into account augmenting their manpower and resources to manage the rising registration numbers effectively.
  • Training & Support: Tax officials need to be trained and effective communication with taxpayers has to be ensured to ensure smooth operation and avoid confusion.
  • Monitoring: Monitoring mechanisms should be instituted in the state governments and feedback collected so that any issue arising during and after migration can be tackled at the earliest.

New Functionality and System Improvements

As CBIC shifted to the GSTN Back Office, tax administrators have enhanced digital tools to utilize analytics, risk profiling, and fraud detection:

Major Tools and Improvements

  • GST Prime:

  • This sophisticated analytical solution allows tax administrators to conduct real-time compliance monitoring, identify circular trading, invoice matching, and supply chain analysis. It is being rolled out at the national level in state and central GST officers.

  • Business Intelligence and Fraud Analytics (BIFA): - BIFA uses artificial intelligence and combines with government database data such as the Public Distribution System (PDS) and Direct Benefit Transfer (DBT) to improve risk scoring for new registrations, detecting potentially suspicious applications.

  • Unified Access:

  • Both the state government and CBIC are now on the same platform, enhancing co-ordination, transparency, and enforcement potential.

Recent Highlights

The CBIC migration to GSTN BO was successfully completed as of June 1, 2024. - All new requests for registration submitted during the period of migration are irrevocably assigned to state tax departments, and not to CBIC. - State tax authorities will need to deal with these taxpayers equally after migration, which will involve continuous resource planning and process optimization. - The renewal of the GSTN's Managed Service Provider (MSP) contract and the launch of GST Prime are indicative of sustained efforts towards the implementation of GST administration modernization. - The migration has eliminated earlier data reporting delay and now facilitates smooth reporting and analysis of returns on the GSTN platform.

Conclusion

The shift of CBIC to the GSTN Back Office on June 1, 2024, is a milestone in India's GST administration. Throughout the transition, new GST registrations between May 25 and May 31, 2024, were transferred to state tax departments, who have permanent jurisdiction over these taxpayers. State tax departments must prioritize streamlining resources and leveraging new digital capabilities such as GST Prime and BIFA to enhance tax administration.

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