How GST Authorities Use Data Analysis and Technology for Investigations

Guidelines issued to tax authorities for the review of Kerala's Goods and Services Tax Refund (GST) shed light on how tax departments use data analytics and technology. The guidelines issued by the Commissioner for the Taxation of Goods and Services for Customs provide detailed explanations of risk factors, red flags and procedures.

These guidelines refer to the main risk factors as well as detailed step-by-step instructions on how the system works, how to identify the risks, and how to investigate how data analysts can identify inaccuracies in your tax returns.

These guidelines also establish risk parameters recorded in the back office system to verify GST returns. "This manual is an important update as it shows the direction/procedures authorities follow when issuing notices," said Harpreet Singh, Indirect Tax Partner at KPMG India. The guidelines stated that some investigators  may not have followed the procedure in the past. “There were certain instances where proper procedures were not clearly followed during return verification and follow-up.

Therefore, the following guidelines/guidelines should be followed to ensure consistency of  field report reviews and  to prioritize and address cases initiated in assessment categories. This guide details how the system detects certain issues and how  tax authorities should investigate them before issuing a notice. The guidelines and guidelines also refer to the pre-tax credit risk parameters used by businesses.

The GST structure allows a company to offset a portion of its future tax liabilities against GST paid for raw materials received from its suppliers. Offset is often in the form of an advance tax credit. “Although the aforementioned guidelines were issued in Kerala, it is likely that other states will adopt similar guidelines/procedures to track anomalies in various documents and notifications,” said Singh.