Artificial Intelligence in GST Administration: Scope and Challenges

The Goods and Services Tax (GST) has transformed India's indirect tax regime by digitalising the process and introducing a single compliance, while providing opportunities for the administration of GST through Artificial Intelligence (AI) due to the availability of data. This paper surveys the possible applications of AI in GST in India and the challenges faced in the implementation of each. Data analytics, machine learning and predictive modeling could be used for fraud detection, fake ITC claims detection, risk-based assessment, risk profiling, revenue forecasting, and automated red flags, among others. In addition to making returns filing easier, AI can help with data analysis for better policy-making. The use of AI for GST administration can encounter difficulties like data privacy issues, cyber security, infrastructure hurdles and lack of technical know-how. Using secondary data, this conceptual paper analyzes the readiness of India's digital tax ecosystem for the introduction of AI and suggests policy measures to help ease the responsible adoption of AI.