GST Council to Approve Invoice Management System to Combat Tax Evasion

The GST Council is poised to approve the Invoice Management System (IMS) rules in its upcoming December 21st meeting, aiming to curb fake invoicing and tax evasion within the GST framework.

The IMS, launched in November, streamlines invoice reporting through real-time validation and cross-verification of supplier data, automatically reflecting invoices in GST returns and minimizing fraudulent input tax credit (ITC) claims.

While the system is expected to enhance transparency and compliance, challenges remain, including seamless integration with other GST modules (e-way bills, e-invoicing), ensuring GST Network (GSTN) stability, and providing adequate support to businesses, particularly MSMEs, for technological upgrades and training.

Currently, manual invoice uploads lead to delays and mismatches, allowing fraudulent ITC claims; however, IMS will facilitate immediate invoice validation and automatic population of GST returns, instantly detecting discrepancies and preventing tax evasion before ITC claims are processed.