AI tools helping identify GST evasion, easing compliance: FinMin

The number of taxpayers registered under GST has increased from 66.5 lakh in 2017 to 1.65 crore as of May 2026, reflecting greater formalisation of the economy, according to the ministry

The finance ministry on Tuesday said advanced technologies like AI and data analytics are being used in GST registration and scrutiny to identify possible tax evasions, while easing regulatory requirements for compliant taxpayers.

The number of taxpayers registered under Goods and Services Tax (GST) has increased from 66.5 lakh in 2017 to 1.65 crore as of May 2026, reflecting greater formalisation of the economy, according to the ministry.

Also, gross GST collection, which stood at around Rs 7.4 lakh crore in 2017-18, has increased steadily over the years.

In the last five years, collections rose from Rs 13.76 lakh crore in 2021-22 to Rs 22.27 lakh crore in 2025-26. In April-May this fiscal, GST collections have reached Rs 4.37 lakh crore.

Introduced on July 1, 2017, GST replaced a complex system of 17 central and state taxes and 13 cesses with a unified indirect tax framework. The reform, rolled out after years of negotiations between the Centre and states, was aimed at creating a common national market with the concept of 'one nation, one tax'.

Over the past nine years, the GST system has been shifting to a data-driven tax administration and a technology-led framework.

"Advanced technologies such as artificial intelligence, machine learning and data analytics are being used for monitoring in a more targeted manner. They help identify possible tax evasion by analysing data patterns and risk indicators," the finance ministry said.

These tools have been applied across various processes such as registration, scrutiny, etc. This allows the system to focus on high-risk taxpayers while easing regulatory requirements for compliant taxpayers, the ministry added.

The impact of these measures extends beyond improving administrative efficiency and has supported India's broader macroeconomic stability. They have made collections more predictable, thereby supporting stronger revenue buoyancy and greater fiscal transparency, the ministry outlined.