Since 2017, the GST system has undergone significant maturation and adaptation, aligning itself seamlessly with global best practices and leveraging cutting-edge technological advancements to optimize operational efficiencies.
Real-time ERP Integration with GSTN
In recent years, the integration of Enterprise Resource Planning (ERP) systems with the Goods and Services Tax Network (GSTN) has emerged as a critical technological advancement for businesses operating in countries with GST regimes. This integration facilitates real-time data exchange between a company’s ERP system and the GSTN, offering a multitude of features and benefits that significantly streamline tax compliance, financial management, and operational efficiency.
The challenges of integrating an ERP system with the GSTN include the complexity of GST regulations and frequent changes and potential compatibility problems between ERP and GSTN infrastructure. Addressing these challenges requires careful planning, expert guidance, ongoing regulatory awareness, and investment in training and change management efforts.
It is anticipated that within the next few years, GSTN may introduce an optional utility that enables large businesses to provide real-time data uploads to the GSTN platform.
Automated notices and chatbot-driven hearings
Chatbots have a rich history that spans several decades. They began as rudimentary text-based programs and have evolved into sophisticated AI-driven conversational agents. OpenAI’s GPT-3 represents a significant leap in chatbot technology, capable of generating human-like text and powering highly advanced virtual assistants.
GSTN has implemented GST Interactive Technical Assistant (GITA), functioning as a Chatbot for Query Handling. In FY2022-23 GITA has adeptly addressed 5.35 lakh queries, attaining an accuracy rate of 92%.
On the global front, the Internal Revenue Service has implemented chatbots to assist taxpayers in finding information, answering common questions, and guiding them through the tax filing process. Implementation of chatbots in tax administration is limited to information retrieval and compliance support. But in the next decade, the progress would be astronomical.
India would be at the forefront to lead the tech driver change, where chatbot automation will extend to the initiation of SCN and the orchestration of hearings, facilitated by chatbot-driven mechanisms.
Recognising the intrinsic value of taxpayer data, the GSTN is poised to implement robust data protection protocols, in line with the evolving Indian Data Protection statutes, akin to the European General Data Protection Regulation (GDPR).
To date, GSTN has not experienced a significant data breach. Nonetheless, the future holds challenges that may not be as idealistic. Data security incidents are an inherent risk in digital environments. In response to this, GSTN would be committed to continuously enhancing its data protection measures by implementing advanced technologies to safeguard data integrity and privacy.
Blockchain in GSTN
The National Informatics Centre (NIC) has developed ‘GST Chain’, a blockchain-based solution to enhance the GST system. This platform aims to integrate with existing systems to address various stakeholder concerns within the GST framework. A key feature of GST Chain is its ability to ensure authenticated and verifiable ITC claims, utilising blockchain technology’s robustness.
Implementing a blockchain-based solution for the GST system could face several challenges in India. The first set of challenges includes the need for technological adaptation, where existing systems must be upgraded to integrate with blockchain technology, and the requirement for stakeholder awareness and training to ensure everyone involved understands and can effectively use the new system. Further, challenges encompass ensuring data privacy in compliance with existing regulations, developing robust infrastructure for scalability, and achieving interoperability with current GST platforms.
The initial implementation costs, potential technical intricacies, and cybersecurity concerns underscore the need for strategic planning and meticulous execution. Resistance to change within organisations and the learning curve associated with the integration may impact productivity during the initial stages. Nevertheless, these challenges can be overcome with careful consideration, continuous innovation, and proactive measures.
Rajat Mohan, Executive director, Moore Singhi