GST Council Lauds AP’s AI-Driven Tax Reforms

Vijayawada:The GST Council has appreciated Andhra Pradesh’s use of Artificial Intelligence (AI) and advanced data analytics in GST administration.

It said the state’s initiatives have enhanced transparency, eliminated subjectivity in case selection, strengthened accountability and improved revenue detection through risk-based enforcement.

The appreciation came at the 57th meeting of the GST Council held in New Delhi presided over by Union finance minister Nirmala Sitharaman on Thursday.

Andhra Pradesh has introduced AI-enabled systems in key statutory functions, including scrutiny of returns under Section 61, audit under Section 65 and inspection under Section 67 of the GST Act. Its AI-based risk assessment engine integrates GSTN data, e-way bill information and third-party datasets to identify high-risk cases using objective, data-driven parameters.

During the first six months of AI-enabled scrutiny, 10,817 cases were zeroed in and tax evasion worth ` 743 crore was detected - against `366 crore under the earlier system. Average detection per case rose from `3.08 lakh to `27.63 lakh.

The system has safeguards and supervisory review mechanisms, with cases being escalated to the joint commissioner, regional internal monitoring committee or state internal monitoring committee, wherever required. Statutory notices continue to be issued by designated officers, retaining human oversight and accountability.

“AI is helping us move from subjective selection to objective, risk-based enforcement. The technology enables officers to focus their efforts on high-risk cases while ensuring transparency, accountability and human oversight. The recognition by the GST Council and interest shown by other states reaffirm Andhra Pradesh’s leadership in technology-driven tax administration,” said Babu Ahmad, chief commissioner of state tax, Andhra Pradesh.

The department has also developed an AI-powered Legal Assistant backed by a knowledge-base of around 22,000 judicial pronouncements and the GST statutory framework. It assists officers in preparing legal instructions, paragraph-wise remarks, counter-affidavits and replies, with all outputs subject to approval by competent officers.

The Legal AI platform currently supports 13,719 cases — 8,098 before the First Appellate Authority, 577 appeals before the GST Appellate Tribunal and 5,044 matters before the high court.

The department said the technology had improved consistency and efficiency in handling litigation without a corresponding increase in legal manpower.

The Rajasthan and Chhattisgarh delegations have already visited AP to study its AI-based systems. Assam, Delhi, Uttarakhand and other states have also expressed interest in studying these initiatives.