India considers implementing e-invoicing under goods and services tax

If the country adopts the system, businesses will likely have to issue invoices, or bills, directly via the GST Network, and the data will be available to the authorities right away. The GST Council has set up a committee to look into the feasibility of e-invoicing. It will also study the systems in place in other countries, such as South Korea and some from Latin America.

The move comes as the new single tax regime, which took effect on July 1, 2017, has seen a rise in incidents of evasion. The GST Council has taken a number of measures, such as introduction of electronic way bills (e-way), to clamp down on tax evasion. Tax experts say e-invoicing can be effective in tackling evasion.

Since the invoices will be issued via GSTN, there will not be a separate need to update information. Evasion, however, primarily takes place in the B2C segment and one will need to find ways to incentivise customers to insist on invoices, particularly in case of services where the possibility of tax evasion is more, GST Council officials said.