CA Sansaar
Government Adopts AI to Curb Massive GST Credit Fraud Losses
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The state government is planning to deploy advanced technology to tackle the growing menace of GST input tax credit (ITC) frauds, which have been causing significant losses to the public exchequer. To address this issue, Artificial Intelligence (AI) and Machine Learning (ML)-based systems are being developed to identify suspicious entities and transactions more effectively.
In this regard, the Commercial Tax Department under the state’s Finance Department has collaborated with BISAG-N (Bhaskaracharya National Institute for Space Applications and Geo-informatics) to build a robust and integrated mechanism for detecting ITC-related frauds. According to official sources, the sheer volume of transactions—running into crores annually—has made manual verification highly impractical, necessitating the adoption of technology-driven solutions.
It is estimated that nearly 29 crore input tax credit transactions are recorded in the state every year. Given such a massive volume, scrutinizing each transaction manually is not feasible.
Therefore, the government has sought BISAG-N’s expertise to design a practical and efficient system to curb malpractices linked to ITC claims.
Officials believe that the integration of AI and ML will significantly enhance the department’s ability to detect anomalies and flag potentially fraudulent transactions in a timely manner. The system is expected to strengthen enforcement actions and improve overall compliance.
Additionally, the proposed AI model will also monitor irregularities involving government personnel. Sources indicated that in certain instances, officials have been found complicit in ITC frauds. The new system aims to identify such discrepancies and ensure greater accountability within the administration.
Once fully developed and refined, the state government intends to implement this AI-driven solution extensively to strengthen its crackdown on ITC frauds and safeguard revenue.
In this regard, the Commercial Tax Department under the state’s Finance Department has collaborated with BISAG-N (Bhaskaracharya National Institute for Space Applications and Geo-informatics) to build a robust and integrated mechanism for detecting ITC-related frauds. According to official sources, the sheer volume of transactions—running into crores annually—has made manual verification highly impractical, necessitating the adoption of technology-driven solutions.
It is estimated that nearly 29 crore input tax credit transactions are recorded in the state every year. Given such a massive volume, scrutinizing each transaction manually is not feasible.
Therefore, the government has sought BISAG-N’s expertise to design a practical and efficient system to curb malpractices linked to ITC claims.
Officials believe that the integration of AI and ML will significantly enhance the department’s ability to detect anomalies and flag potentially fraudulent transactions in a timely manner. The system is expected to strengthen enforcement actions and improve overall compliance.
Additionally, the proposed AI model will also monitor irregularities involving government personnel. Sources indicated that in certain instances, officials have been found complicit in ITC frauds. The new system aims to identify such discrepancies and ensure greater accountability within the administration.
Once fully developed and refined, the state government intends to implement this AI-driven solution extensively to strengthen its crackdown on ITC frauds and safeguard revenue.
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