Using Data Analytics and AI to Identify GST Evasion Cases
GST officers in India are increasingly relying on data analytics and artificial intelligence (AI) tools to identify risky taxpayers suspected of evading taxes or availing fake input tax credits. According to a recent update provided by Minister of State for Finance Pankaj Chaudhary in response to the Lok Sabha, a total of 14,597 cases of Goods and Services Tax (GST) evasion were registered by central tax officers during the period of April to December 2023.
Key Findings:
| State | Number of Cases Registered |
|---|---|
| Maharashtra | 2,716 |
| Gujarat | 2,589 |
| Haryana | 1,123 |
| West Bengal | 1,098 |
Chaudhary mentioned that various data analytics and AI tools like NETRA (Networking Exploration Tools for Revenue Augmentation), BIFA (Business Intelligence and Fraud Analytics), and ADVAIT (Advanced Analytics in Indirect Taxation) are being employed to identify risky taxpayers, particularly those suspected of passing or availing fake input tax credits, even in states like Andhra Pradesh.
During April-December of the current fiscal year, GST intelligence officers have uncovered fake input tax credit (ITC) cases totaling Rs 18,000 crore and apprehended 98 fraudsters/masterminds. Chaudhary highlighted that these tools are regularly updated and modified based on feedback from field formations.
Additionally, Chaudhary emphasized the robustness of the GST registration process, which includes physical verification of premises and Aadhar authentication. These measures have facilitated early detection of fraudulent registrations and significantly reduced such instances.
Furthermore, pilot projects on risk-based biometric Aadhaar authentication are underway for registration applications in Gujarat, Andhra Pradesh, and Puducherry.
This initiative signifies a proactive approach by GST authorities in leveraging technology to combat tax evasion effectively.