“India is the only country that is doing it (invoice-to-invoice matching). This is unique…People will have to comply or they will fall out of the GST chain,” Raistrick told ET in an interview.
In an interview with the ET, David Raistrick of Deloitte brings forward a major impact that Invoice to Invoice matching will have on tax compliance in the country. He talks about how the new invoice matching system will exert great pressure on those who thrive in a cash economy. He said invoice-to-invoice matching will make it harder for people to use cash and for people to be in business and not pay tax. “Only those who play in the cash economy will feel the pressure as they will lose credit,” he added.
David Raistrick who heads indirect tax for Deloitte talks about how the new invoice to invoice matching system in India is unique and believes that the world will also soon follow. In the same interview, he also mentions how this move to the GST system will open the doors in India to foreign investments. He talks about the complexity of the current tax regime in the country and how it has been a deterrent for many organizations. He said that the world and all the international organizations understand GST and will be more open to making investments in the country now. The biggest win of the new regime will however remain to be the invoice to invoice matching for a while to come.
The GST environment in India, supported strongly on IT infrastructure, has been built to enable not just the receiving on data on invoices to allow calculation but also maps the invoices of an organization with its suppliers to ensure a match. When a mismatch is identified with tools provided by GSPs or ASPs, an alert will be sent to the taxpayer highlighting the mismatch so that he can take corrective actions and invoice reconciliation with the supplier way ahead of GST return filing. This process will be repeated every month.
This is where the role of GSP is highly critical. Apart from being responsible for ensuring secure transmission of accurate return filing data from an organization’s ASP, GSP is also the pathway through which the GSTN sends back alerts to the organization in the event of a mismatch. This is one of the many reasons why an organization, registered with the GSTN and dealing with large number of invoices every month, needs a GSP service. In addition to its Vayana GSP Solution, Vayana Network has built VICAS (Vayana Invoice Confirmation and Acceptance Service). Given that around 20% of invoices do not reconcile for a variety of reasons in normal trade, VICAS comes with a continuous dashboard that buyers and suppliers can update collaboratively and detect any discrepancies at an invoice and line item level.
Source: Economic Times