Tax authorities in India hope to improve their ability to detect and crack down on under-invoicing of imports once a new goods and services tax network (GSTN) is installed and operational.

The new system, which also requires importers to submit additional information to the authorities, should help detect practices typically used to evade tax and customs payments.

Price tracker

Using the GSTN, the Central Board of Excise and Customs (CBIC) will be able to match prices shown on invoices with market prices, or detect tax evasion where mismatches are identified.

Traders will have to provide the additional information to CBIC on registered invoices so that the authorities can track the history of transactions. Importers will only be able to claim tax credits against registered invoices.

Database prospects

No comprehensive database of prices of commonly imported goods is currently available to the Indian tax authorities.

They hope the new online network, as it captures data on sales transactions involving goods on the database, will help in building such a database.