Indian Businesses Should Explore Artificial Intelligence for GST Compliance

Businesses are running from pillar to post to in an effort to understand and implement the Goods and Services Tax (GST)—one of the biggest reforms in India’s indirect taxation. They have to be ready for the digital transformation currently underway. It is critical to leverage technology and automation to navigate the treacherous path of GST compliance. Enterprises need to know quantum of taxes, application of tariffs and rate slabs, and procedures and compliance rules. Moreover, there are factors which make the GST complex, such as input tax credit, destination system, exclusion, twin rates—complex issues that are better left to machines.

Automation will help enterprises save money as well as avoid costs of non-compliance. Businesses are better off with data to navigate the GST maze faster and more efficiently. It will be impossible to manually manage the high volume of reporting and transactions when information crosses so many check points—non-compliance at any point could lead to immediate consequence.

Some Examples of GST Compliance Issues

A simple example is that if a vendor doesn’t deposit GST in time, an enterprise needs to follow up incessantly with the vendor or pay the tax without computing input credit. Another example: how to compute GST in case the point of supply, the final destination and the invoicing points are all different. In such a case, different GST components would work simultaneously. The procedure can be particularly troubling in the freight and logistics industry where factors such as treatment of supplies, transition procedures, capital goods credit mechanism and bundled services become important.

Application of Artificial Intelligence Tools for GST compliance

In-house enterprise tools need to be synchronized with AI software for optimized supply chain models, inventory management, manufacturing and warehousing according to GST requirements. AI solutions for financial services can bring together digital, business and technology elements to help enterprises solve complex tax challenges. Businesses can cut compliance costs, improve on procedural bottlenecks and enhance user experiences through techniques such as Robotic Process Automation, Natural Language Processing, Chatbots, Data Science, Cognitive Machine Learning, and Robo-Advisors.

Enterprises can solve regulatory and compliance requirements, service customer needs and complex data challenges through a judicious use of AI software. The tools can help automate repetitive tasks, thus cutting down costs and time with advanced and customized bots for specialized GST operations including invoice generation, warehousing and supply chain management. Global financial services and technology provider Synechron’s AI tool “Neo” is an example. A user could communicate and access tax experts in their own language. A repository of all GST-related communication can be maintained along with contextual search.

Indeed, the GST opens up floodgates to emerging technologies such as Artificial Intelligence, Natural Language Processing and Machine Learning. All businesses, including e-commerce, m-commerce and social commerce should adopt such technologies for success and survival.

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Muqbil Ahmar

Muqbil Ahmar is a tech evangelist, environmentalist, women's rights advocate, editor, and founder of He writes on ...

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