The centre is ready to use blockchain technology to restrain fake invoicing and GST claims. Blockchain technology will be adopted to manage warehousing and monitor goods movement during the first implementation phase. Through this, the government aims to catch fake Input Tax Credit (ITC) claims at the earliest, especially where taxpayers file a fake supply of goods in GST returns.
The central government may adopt new-age technologies to automate the GST process. The government is currently focusing on detecting GST evaders using blockchain technology.
Blockchain is the same technology used to mint the cryptocurrency and keep it safe. Several Indian industries are already using blockchain technology to keep their business processes safe and secure. Blockchain is presently a protocol for accounting and recordkeeping over the internet without an intermediary. Industry experts say it can transform many industries, streamlining the business processes to make it more transparent and efficient.
With blockchain technology being implemented, the GST department expects to receive error-free information relating to the taxpayers filing ITC claims. Further, the system also reports fake invoices and fraudulent ITC claims in the blockchain system.
Hence, the GST department may use blockchain technology for monitoring the ITC flow in GST along the supply chain. However, this technology is not expected to create any fresh problems for the working capital arrangement of business owners.
Blockchain technology has enormous potential to remove the technical glitches and enhance the taxpayers’ efficiency in GST compliance. GST invoicing are the fundamental document needed at every stage of the supply chain from the point of purchase to the filing of GST returns. Blockchain technology provides an automatic settlement and can fully validate the matching of documents between vendors and purchasers.
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Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.