With the aim of keeping a check on tax evasion and fraud, GST Network (GSTN) has invited bids from private entities for “360 degree” profiling of taxpayers. This would transform the tax collection portal to an end-to-end platform that would help in early detection of frauds.
The GSTN Plan GST
As per the GSTN plan, the analytics company that will be roped in for the profiling will be designing and developing a Fraud Analytics System. Reportedly, Infosys has been barred from bidding so as to avoid conflict of interests.
The proposed system would leverage existing data pertaining to GST registration, return filing, e-way bill, and information from other external sources. These include Financial Intelligence Unit (FIU), Central Board of Direct Taxes (CBDT), banks, and state tax departments.
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Eligibility Criteria for Bidders
The system would be implemented in a period of one year from now. The eligibility criteria for bidders, as mentioned by GSTN in the Request for Proposal (RFP), requires the entities to have a turnover of more than INR 300 Crores along with the condition that it must have made profits in the past 3 years. Besides, the entity is required to have an experience in implementing Advanced Analytics.
Tasks assigned to the Bidder
Talking about the tax assigned to the bidding entity, it will be required to establish the taxpayer’s identity using the information available with GSTN and the third party. The fraud analytics company would be assigned the duty of establishing the 360-degree view of the taxpayer and key members of management using all the provided details.
Risk profile of the taxpayer
Furthermore, the risk profile of the taxpayer will be established by making use of the information on purchasers and sellers as part of returns data. Several factors will be evaluated like whether the taxpayer is dealing with evasion prone commodities, history of the owner of the company, rapid change of promoters, and so on.
The private entity would be appointed for 6 years and will be responsible for suggesting ways to prevent revenue leakages, forecast revenue growth, and other econometric policy formation like changing the rules to plug loopholes and identifying evidences for prosecution of fraudulent taxpayers.
Confidentiality of data
Considering the sensitivity of data, the eligible bidder is required to ensure full confidentiality by undertaking the fraud analytics project in a separate section of their office premises. Also, the GSTN may choose to place one or two of its employees there for monitoring the project. The people involved in the project will be strictly prohibited from using storage devices like USB sticks in the GSTN premises.
 has invited bids from private entities for “360 degree” profiling of taxpayers. This would transform the tax collection portal to an end-to-end platform that would help in early detection of frauds.){kind=link}