Leveraging AI and Data Analytics to Monitor GST Tax Evasion

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India is shifting its focus from human to machine to improve the speed and quality of economic data. The government is actively involving modern technologies such as artificial intelligence, data analytics and others in existing processes for the national benefit. Citing the use of data analytics in tracking Goods and Services Tax (GST) Tax Evasion, Doctor Ahmad IqbalIAS, GST Commissioner, Government of Uttarakhand, interacted with Krishna Mishra of the Elets information network.

In your opinion, can data analytics be an effective tool to optimally manage TPS revenues?

Yes. The Goods and Service Tax Network (GSTN) Portal provides extracted and analyzed data to states and the analyzed data helps identify excessive and questionable Input Tax Credit (ITC) use, credit used on false invoices and the mismatch between statements like GSTR1, GSTR-3B and GSTR-2A, etc. Our nodal IT manager and his team are also adopting zone and taxpayer identification techniques. By targeting them, we can achieve additional revenue. The analysis of electronic invoices and electronic transport invoices is also useful. I think data analytics will play a much bigger role in the future and tax evaders will find it difficult to evade taxes.

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With the rise of emerging technologies, it is said that automation, AI and the cloud will reshape the future of government operations. How would this transform the operations of the GST department?

Data is not stored in the cloud at this time. Future plans regarding the use of the Cloud should be developed by the GSTN Portal. A document was published by the Organization for Economic Co-operation and Development (OECD), in which the experience of 21 countries in preventing and detecting tax evasion through technology and several other ideas were discussed. We intend to address the issue so that efforts can be made at the India-wide level. GSTN would also respond better to details around AI and automation. But at the state level, we’re trying to automate several outcomes, so the time it takes to generate analyzed data decreases and tracking and investigation can happen quickly. AI is a new field and we need to see how we can use AI techniques.

What measures is the government of Uttarakhand taking to ensure GST compliance? How do you leverage technology to identify non-compliance and move to criminal action?

We have a system to provide agents with circular updates and legal updates. We have developed 24 service profiles and have a system to present them to agents on a weekly basis. We have also started to interact with professional associations to understand their problems and collect their suggestions. We use print and other types of media to publicize what we do. We have identified over 35 areas where, with follow-up action, we could realize substantial additional revenue. We conduct regular training programs to improve the knowledge base and capabilities of agents. Most presentations take place virtually and we regularly use video conferencing for our meetings.

Goods and Services Tax (GST)

We use technology to identify areas of tax avoidance. Regular data on reporting defaulters and tax defaulters are generated and monitoring is strengthened. We realized that auditing and investigation will be key areas for us. Recently we made the first arrest of a tax defaulter and intend to use the carrot and stick approach.

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What is the way forward for the GST department of Uttarakhand? Do you consider lack of awareness a cause of GST non-compliance? If so, how do you approach this?

We intend to improve the capacity of our officers and introduce performance appraisals on a regular basis. We intend to provide data and information to agents so that they can achieve results. Lack of taxpayer awareness of the consequences of non-registration and non-payment is an issue that will receive greater attention in the months ahead. We have already started to meet with the professional association and we intend to expand it further. You will see more interactive programs by department.


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