Government APIs May Revolutionise Tax Filing for Large Taxpayers, Reducing Manual Intervention

In the future, the tax filings and compliance for large taxpayers, including corporates, foreign institutional investors, and multinational companies, may completely shift to automated, as the Central Government has allowed access to the Application Programming Interface (API) of its tax portals to third parties.

The government had already given access to the API for Goods and Services Tax (GST) systems, and the same access for direct taxes under the CBDT (Central Board of Direct Taxes) is likely soon, as per the reports. As per the experts, this access will facilitate consulting firms and technology providers in making Artificial Intelligence (AI)-based tools, which will ultimately contribute to reducing manual intervention in tax compliance in a significant manner.

This will be a crucial move from the side of the government, as initially, companies needed to depend on government portals to track their GST, income tax, and customs-related filing status, notices, and legal actions. On one hand, the government has shifted almost all the filings online, while there are still some compliance processes that require manual checks via government portals.

For example, when an individual files an appeal before the Income Tax Appellate Tribunal (ITAT), as of now, that individual is required to check the tribunal’s website several times for the latest updates. If the aforesaid API-based integration is implemented, then such updates will be directly sent to the concerned company’s internal systems.

In terms of GST, the Application Programming Interface (API) already permits companies to keep an eye on their vendors’ MSME status (such as if the payment of MSME dues is made within the statutory time limit of 45 days) and automatically comply with special provisions.