Nikhil Goyal · August 2026
Every registered company in India has to keep books and file GST, TDS, income tax and ROC returns. It isn't optional and it isn't annual. GST is monthly. About 1.8 million active companies are on the hook, and roughly 15,000 new ones register every month, 96% of them private limited.
The Ministry of Finance was asked in Parliament this February how much Indian businesses pay in GST late fees. The answer was about ₹2,000 crore a year, every year, for four years running.
And that's GST alone. GST is one filing among many. A private limited company also files ROC and MCA annual returns, where the late fee is ₹100 per form per day and is not capped at all, so two forms a year late runs to about ₹73,000. TDS returns every quarter, at ₹200 a day plus a separate penalty of ₹10,000 to ₹1,00,000 at the assessing officer's discretion. Income tax returns. Advance tax, quarterly. PF and ESI once you have staff. Director KYC. Professional tax in most states. Every one of them carries its own deadline and its own late fee, and not one of them is published as a national total the way GST is. So ₹2,000 crore isn't the number. It's the only piece of the number anyone has bothered to add up.
None of this is tax. None of it is a fine for doing anything wrong. It is money businesses pay because paperwork arrived late.
The founder. Every time.
I've been reading through public complaint forums for months now, and the same story repeats with different numbers attached. A director whose CA didn't file the annual return, asked afterwards to deposit ₹43,700 to MCA. An LLP owner who ran up ₹65,000 in late fees across ITR, ROC and KYC because his provider handed over documents only after the due dates had passed. A founder in Bengaluru whose ROC filing was forgotten and who paid a ₹70,000 penalty. One I keep coming back to: a director whose CA didn't file ROC for three years and said nothing, and who found out when MCA sent notice that his company was being struck off.
I've been on this side of it myself. I've run companies in India since 2013. My books were routinely a month or two behind, I kept my own P&L in a Google Sheet because I didn't fully trust the one I was being sent, and notices arrived that nobody had seen coming.
This is the part that made me want to build something, and it isn't a story about bad accountants. Most are decent people carrying too many clients on a manual process. It's that the structure guarantees the outcome.
There's no status channel. If you want to know whether your return was actually filed, the reliable way is to log into the government portal and check yourself. Ask the internet how to know whether your CA has filed and you'll find the question asked over and over, with that as the consensus answer. Nothing tells you a deadline is approaching. Nothing tells you it passed.
The cost lands entirely on one side. The taxpayer who signs owns the liability for what's filed, whoever prepared it. An honest error by your accountant still means you owe the tax plus interest. The late fee is yours. The notice has your name on it.
And there's effectively no recourse. To complain to ICAI about a member costs the wronged party ₹2,950 up front, filed in triplicate, wet-signed, in English. Of cases ICAI has investigated since 2007, about 40% ended in any action at all, and hundreds sit pending with no statutory time limit. When a fine is imposed it's payable to ICAI. It never reaches the client. So the person who was supposed to do the work faces nothing, and the person who didn't do it pays for all of it.
That's the real problem. Slow books are just what you notice first.
India has plenty of accounting software. Tally is in most CA offices already. ClearTax, Zoho, and a dozen others sell tools.
None of it changes who is accountable, because all of it is sold to whoever is already doing the work. Better software makes an overloaded firm slightly faster. It doesn't make anyone answerable, it doesn't tell the founder anything, and it doesn't move a single deadline.
The other reason is less discussed. This buyer will not swap a trusted person for a better tool. A wrong filing isn't a bug report, it's a notice. A founder will keep an incumbent who's 60% reliable over a startup that claims 90%, because the incumbent is a person they can call. Any honest read of this market has to start there.
The work itself became automatable. Not the tooling around the work, the work.
Reading a vendor bill and pulling out line items and tax. Categorizing a bank feed. Reconciling. Drafting a GSTR-3B. That's what a junior in an accounting firm does all month, and models now do it well enough to be worth checking rather than worth redoing.
The economics moved at the same time. Stanford's AI Index put the cost of a GPT-3.5-equivalent query at $20.00 per million tokens in late 2022 and $0.07 two years later. Roughly 280 times cheaper. A firm's cost structure is headcount. If the labour is now mostly inference, the same service can be delivered at a completely different margin, and the money that used to buy hours can buy accuracy and attention instead.
Become the firm, not the software. If the problem is that nobody is answerable, selling a tool to the person who's already there can't fix it. You have to take the job.
Three things follow from that.
Everything gets logged. Every action, human or AI, recorded with the reasoning behind it and the model version that produced it, append-only. That's the direct answer to a market where nobody can tell you what was done or why. No traditional firm can show a client this, because their process lives in someone's inbox.
A CA stands on the record. Not as decoration. Some work legally requires a Chartered Accountant to sign, and a non-CA entity can't sign it. So we don't. That's also the trust bridge, because Indian SMBs buy from a named person, not a brand.
Accuracy has to be measured, not claimed. This is the part I find most interesting about the category. In most places you can put an AI, you never really find out whether it was right. Here you find out every month, transaction by transaction, because a human corrects the draft before anything is filed. So it gets better every month instead of being something I just claim.
I've built a pipeline that takes a month of a company's bills and bank statement and produces reconciled books and a GSTR-3B draft, logging every step. I built it myself.
Across six real client books, the first-pass drafts are 94% correct at transaction level, measured against an accountant's corrections. Everything still goes through human review before anything is filed, so 94% is where the process starts, not what a client receives. Those six are development books, not paying customers.
Fifteen founders in the profile I sell to have talked to me about this, and twelve told me what they currently pay their accountant. The median is ₹18,000 a month. The budget exists. It's already being spent, on a service where the ₹2,000 crore above is somebody's line item.
Whether a stranger will pay me for this.
I have a CA at verbal commitment with an LOI in progress, a working pipeline, and a set of founders who've told me what they spend. What I don't have is a signed arms-length customer. Until that exists, everything above is a well-researched argument rather than a business.
That's the next thing I'm doing.
Sources: GST late fees — Ministry of Finance, Unstarred Lok Sabha Q. No. 387, answered 2 February 2026 (₹1,960 cr FY22, ₹1,968 cr FY23, ₹1,988 cr FY24, ₹1,749 cr FY25); the government's own term is "late fees," not penalties. Company counts — MCA. Inference cost — Stanford HAI AI Index 2025. ICAI complaint procedure and disciplinary statistics — disc.icai.org. Founder grievances quoted from public forums (CAclubindia, Quora, ComplaintsBoard); these are recurring organic complaints, not adjudicated findings. The ~40% figure is the share of cases ICAI investigated that resulted in action, against roughly 400,000 registered CAs — it is not a claim about the profession.