The Goods and Services Tax Network (GSTN), which is the technology interface between government and taxpayers, is due to be integrated with the country’s ambitious financial data sharing network — Account Aggregator—before July 1, according to top officials overseeing the process.

This can significantly reduce friction in credit disbursement as it will enable small businesses to authorise lenders to access their tax records along with other financial information on a single platform.

The AA system is part of the array of Digital Public Infrastructure (DPI) that India has launched in recent years including others such as the Unified Payments Interface (UPI). It has been linked to more than 75 lakh bank accounts since its launch in September 2021, according to BG Mahesh, co-founder, and CEO of Sahamati, the non-profit that is promoting AA.

The tax network GSTN has close to 1.4 crore registered taxpayers.

“GSTN is about to go live on AA in a matter of weeks. The implementation has been done. The numbers will further increase after that since the small businesses or GSTN payees will start applying for loans and they will be able to use AA for that,” Mahesh said.

In response to ET’s queries on the development, GSTN officials did not specify the exact date on which the network will go live on the AA system but said it will be before July 1.

Finance Ministry officials said that banks and lenders can use GST returns as a financial statement to assess the financial health of small businesses.

“This will help in seamless sharing of account information of taxpayers and will help them in saving paperwork by allowing lenders to easily pull-out data from GST returns along with their savings, pension account and other aggregators,” they added.

Additionally, it will also help them “use the data to arrive at the correct tax assessment and will improve scrutiny,” officials noted.