A Secondary Study on the Role of Generative AI in Enhancing GST Compliance Efficiency among MSMEs in Gujarat

Abstract

The introduction of the Goods and Services Tax (GST) in India aimed to simplify the indirect tax system and improve transparency. However, compliance with GST regulations remains a significant challenge for Micro, Small, and Medium Enterprises (MSMEs), particularly in regions such as Gujarat. This secondary research paper examines the potential of Generative Artificial Intelligence (AI) in enhancing GST compliance efficiency among MSMEs by analyzing existing literature, industry reports, and government publications.

The study identifies key challenges faced by MSMEs, including complex filing procedures, invoice mismatches, Input Tax Credit (ITC) reconciliation issues, and frequent regulatory updates. These challenges often result in increased compliance costs, errors, and operational inefficiencies. The paper explores how Generative AI, as an advanced form of artificial intelligence, can address these issues by automating tax-related processes, improving data accuracy, and providing real-time insights.

Through a comprehensive review of secondary data, the research highlights the capabilities of AI-driven tools in invoice processing, anomaly detection, tax classification, and compliance reporting. Additionally, the study evaluates the benefits of AI adoption, such as reduced manual workload, improved accuracy, faster filing processes, and enhanced decision-making capabilities.

However, the paper also identifies barriers to adoption, including high implementation costs, lack of digital awareness, and data security concerns among MSMEs. The findings suggest that while Generative AI has significant potential to transform GST compliance, its successful implementation requires supportive policies, affordable solutions, and increased technological awareness. This study contributes to the growing body of knowledge on AI-driven business transformation in the MSME sector.