The Goods and Services Tax (GST) department is set to implement an advanced artificial intelligence and data analytics system to scrutinize GST returns and monitor any discrepancies. This system, expected to be launched in the coming days, will utilize advanced technology to correlate data from various GST returns filed by taxpayers. It will also incorporate data from external sources such as bank accounts, payments, and invoices to ensure accuracy in GST returns.
Finance Minister Nirmala Sitharaman, in a review meeting on April 29, directed the Central Board of Indirect Taxes and Customs (CBIC) to introduce this automated GST return scrutiny system by the following week. Similar to the income tax department's computer-assisted scrutiny selection (CASS), the new system will automatically send notices to taxpayers if any discrepancies are identified in their GST returns. Taxpayers will have an opportunity to rectify genuine errors in their returns.
This move is part of the government's efforts to expand the taxpayer base and enhance compliance. Experts anticipate that the automated return scrutiny system will result in an increased number of notices being issued. It is expected to play a crucial role in preventing tax evasion, improving compliance, and boosting revenue collection. As a result, registered GST taxpayers will need to exercise more caution while filing returns.
The GST department has been focusing on leveraging data analytics to improve compliance. In a recent meeting of central and state tax officials, the use of data analytics was highlighted as a key strategy to combat tax evasion. The Advanced Analytics in Indirect Taxation (ADVAIT) system has been enhanced to provide deeper analysis of revenue, export-import trends, and outliers in both customs and GST using advanced data science models.
By utilizing advanced artificial intelligence and data analytics, the GST department aims to streamline the tax filing process, reduce discrepancies, and enhance overall compliance in the GST regime. The implementation of these technological advancements signifies a significant step towards a more efficient and effective tax administration system.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.
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