The government’s efforts to increase the efficiency of the indirect tax system and to check evasion of Goods and Service Tax (GST) set to reach the next level as the department will be able to intercept suspicious transactions on a real-time basis and pre-empt fraud. The plan is to enable tax officials to block the generation of the electronic invoice if any red flags have been raised against that business.
Electronic invoicing is the system of validating transaction details real-time, which has been made compulsory for companies with sales more than Rs 500 crore from 1st October and will be further expanded to cover all businesses. The government is planning to extend the applicability of e-invoicing with more than 100 crores from 1st January 2020.
The main advantage is that the tax administration can intercept a bogus transaction. Already, with data mining and the use of artificial intelligence, officials can detain fake invoices and fake companies before it is too late and protect the revenue.
Now, with the help of data analytics, the department can identify and block suspicious entities from issuing electronic invoices so that they can not misuse the system. While deterring fraudulent elements, the department also provides greater simplicity and convenience to honest taxpayers.
Fake invoicing, frauds around export incentives and abuse of tax credits have been a major headache for the indirect tax administration. The data sharing among various enforcement agencies, use of advanced technology, steps like e-invoicing and strict oversight of the use of tax credits would remain critical elements of the GST compliance enforcement measures.
The government has been inclined towards leveraging technology, and already many states are using artificial intelligence to identify GST evasion. This facility would become the norm and be implemented on a full scale once the technical glitches in the network are resolved, and the filings become more seamless.
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DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.