Under the GST 2.0 regime, India is enhancing tax compliance through expanded e-invoicing mandates and advanced AI-driven invoice monitoring—a leap toward real-time transparency and fraud control.
E-Invoicing Becomes More Inclusive
- The e-invoicing threshold has been steadily lowered from ₹500 crore down to ₹5 crore, effective 1 August 2023. Now, businesses with an aggregate annual turnover of ₹5 crore or more must generate e-invoices for B2B transactions.
- E-invoicing ensures invoices are validated through the GST Network’s Invoice Registration Portal (IRP), assigned an Invoice Reference Number (IRN), and embedded with a QR code—streamlining input tax credit (ITC) processes and reducing mismatches.
Why it matters: India now leads global e-invoicing adoption, with over 80% of invoices received and 70% issued electronically—well above international averages. This shift promises productivity gains, reduced fraud, and estimated benefits of over ₹32,000 crore annually.
AI & Real-Time Fraud Detection
- The Directorate General of GST Intelligence (DGGI) and state authorities, like in Andhra Pradesh, are adopting AI-based systems to detect fake invoices and fraudulent ITC claims through real-time integration of GSTN, e-way bill, and registration data. This marks a shift from traditional audits to intelligent, automated oversight.
- AI-powered modules—such as anomaly detection, supplier risk scoring, and notice intelligence—compare e-invoice, e-way bill, and return data to flag mismatches like HSN issues, suspicious vendor networks, or suspicious filing behavior.
- Advanced systems—employing graph analytics and supervised learning—assign risk scores to taxpayers based on behavior and filing consistency. High-risk entities are flagged for audits, while compliant ones enjoy expedited processing and refunds.
- The emerging Model Context Protocol (MCP) ecosystem connects AI agents—fraud detectors, refund validators, tax assistants—like a conductor orchestrating a seamless, context-aware compliance mechanism.
Why This Matters
- Transparency & Trust: More businesses are now under the purview of digital invoicing, significantly enhancing the reliability of GST data.
- Speed & Accuracy: Real-time validation and AI oversight reduce manual errors, minimize fraud, and smoothen ITC reconciliation.
- Digital Transformation: GST 2.0 accelerates India’s transition into a data-driven indirect tax regime—reducing friction, improving compliance, and strengthening fiscal integrity.
