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Governance refers to the exercise of political, economic, administrative authority in the management of the country’s affairs, including citizen’s articulation of their interest and exercise of their legal rights and obligations.

Background: What is Governance?

What is e- Governance?

e- Governance may be understood as the performance of the

governance via the electronic medium in order to facilitate an

efficient, speedy and transparent process of disseminating

information to the public and delivery of services

About e-Governance

ICT

Sharing of information

Engage Citizens

Service delivery

Efficiency

Effectiveness

Transparency

Welfare

National e-Governance plan vision

• "Make all Government services accessible to the common man in his locality through common service delivery outlets and ensure efficiency, transparency & reliability of such services at affordable costs to realise the basic needs of the common man".

•

Addl.CCT HQ-I

COMMISSIONER OF COMMERCIAL TAXES

Addl.CCT

HQ-II

Addl.CCT (P &

L)

Addl.CCT (I &

C)

Addl.CCT

(Vig) Addl.CCT

(Zone I, II, III)

4 Adcoms in KAT

Joint Commissioners

DVO- 13 Division

Addl. Commissioner (Enf) SZ

JCCT(Vig)Bangalore

and

7 in other than Bangalore

JCCT(Enf)

Joint Commissioner

Appeals 13 posts

(6 in Bangalore and

7 in places other than Bangalore

LVO / VSO

PTO, ETO, LTO,

AUDIT OFFICERs (

DCCT, ACCT, CTO ),

Internal Audit

Officers(DCCT, CTO) and

STAFf

DCCT

ACCT

CTO

STAFF

ORGANISATIONAL STRUCTURE

JC Minor Act

Addl.CCT

(GST)

JC ( IT ) JC (HRD) JC (INS&

AUD))

Addl.CCT (LA)

ETOs

LTOs

PTOs

and staff

Of Bangalore

JC ( P&L) JC ( LA)

COMMERCIAL TAXES DEPARTMENT KARNATAKA

Acts administered by the CTD

1 •Karnataka Sales Tax Act

2 •Karnataka Value Added Tax Act

3 •Central Sales Tax Act

4 •Karnataka Tax on Entry of Goods Act

5 •Karnataka Tax on Professions, Trades, Callings and Employments Act

6 •Karnataka Luxuries Tax Act

7 •Karnataka Entertainments Tax Act

8 •Karnataka Agricultural Income Tax Act

9 •Mysore Betting Tax Act

Acts Administered by the Bihar Commercial Taxes

1. Value Added Tax 2. Central Sale Tax 3. Entertainment Tax 4. Luxury Tax 5. Entry Tax 6. Professional Tax 7. Electricity Duty 8. Advertisement Tax

The Commercial Taxes Department

The Commercial Taxes Department in Karnataka contributes more than 60% of the revenue by way of own taxes to the State.

Collects about Rs. 42,000 crores per annum.

Has a total strength of about 7000 employees including 800 officers.

Administers 9 different Tax laws – VAT, KST, CST, Luxury Tax, Profession Tax, Entry Tax, Betting Tax and Entertainments Tax

The Department is structured in a combination of Territorial and Functional jurisdictions.

Has 13 administrative divisions, 118 VAT offices, 18 checkposts, 7 enforcement divisions, 13 appeals divisions and 100 mobile checkposts.

It is an indirect tax.

Each sale transaction is taxed.

Earlier KST was imposed generally at the first point of sale.

VAT brought in the concept of tax at all points but with set offs at each stage (The Input Tax Credit).

The dealers is mandated to issue a bill from a bill book whose features are prescribed by the department.

The dealer consolidates all the bills at the month end and remits the due tax to the Department – The monthly return

The mechanism of collection of sales tax (VAT)

There are about 5.13 lakh registered dealers (tax payers)

These tax payers have to file monthly/quarterly/yearly returns and remit taxes.

They also approach for services/compliance like collection and submission of statutory forms, etc.

VAT is payable on sale of goods which involves various players like the manufacturers/dealers, transporters, consumers and the tax collectors.

Thus collection of VAT manifests itself in a complex relationship between the taxpayers, the citizens (consumers), the transporters and the department.

The mechanism of collection of sales tax (VAT) Continued…

Dealers • E-VARDAN – Online registration

• E-payment – Online payment of Taxes

• Auto C forms: Dealer downloads C forms Automatic ally

• E-CST – Online request & issue of the CST forms

• E-Grievance – Online grievance redressal

• E-Clearance – Online request & issue of Clearance Certificate

• M-Services – Mobile Based Alerts

Transporters • E-SUGAM/M-SUGAM forms – Online request and download of Form for Goods movement

• E-SUVEGA forms – Online request for Transit Pass for movement of goods through State

• E-UPASS- Uploading of purchase and sale statements

• e-Grahak/m-Grahak – SMS based information/complaint by public on the dealer

• E-CAS – Comprehensive Audit System

• E-reconcile – Tax Collection Reconciliation system

• E-enforcement System

• E-DCB – Demand Collection Balance System

• E-Dealer File – 360 degree dealer view

• EDI- online realization and reconciliation of instruments

• Monitoring of defaulters and messaging

• RISK Analysis System

• Verification of claims of ITC

Dealers Officers Citizens

E-Services for Main Stakeholders

VAT, 23577

KST, 7210

KTEG, 2646

CST, 1897

PT, 799

LT, 300

KET, 169 BT, 154

AIT, 21

Actwise Collections for the year 2013-14 (`in Crore)

Total Collections ` 36773.00 crore

VAT, 64.12

KST, 19.61

KTEG, 7.19

CST, 5.16

PT, 2.17 LT, 0.82 KET, 0.46 BT, 0.42 AIT, 0.06

% of Total Collections

11326 13691

15670 16629 18133

22803

27611

31876

36773

0

5000

10000

15000

20000

25000

30000

35000

40000

Trend of Collections from 2005-06 to 2013-14( ` in crore)

20.9

14.5

6.1

9.0

25.8

21.1

15.4

15.4

0.0 5.0 10.0 15.0 20.0 25.0 30.0

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

Growth Rate (in % )from 2006-07 to 2013-14

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• Bulk sales necessarily through a truck. • Each truck had to be accompanied with a

Delivery Note duly filled up. • Blank delivery notes issued by the tax office. • The entire effort of the department was to

make a trader issue a Delivery Note and then force him to account it.

• Checkposts set up at vantage points to collect the delivery note for future cross-verification.

The birth of check post

• One Lakh+ documents per day – any cross verification impossible.

• Non surrender of a document generated huge benefits for traders

• Tremendous discretion for officer-scope for corruption.

• Long waiting time for transporters • Recycling of documents • Traders faced difficulties in

obtaining blank delivery notes

lose-lose-lose system

Reforming the checkpost shift

Simple Uploading of Goods Arrival and

Movement

Earlier regime based on philosophy that trader should

use delivery note and Department’s entire effort was

geared towards making trader account the transaction

in his/her books of accounts.

This paradigm sought to be reversed in –

Sugam – The trader accounts the transactions first and only then can he/she despatch the goods.

BEFORE AND AFTER E-SUGAM & RESULT DEMONSTRATION

Highlights

Anytime any anywhere from parallel web-sites

No need of printed form, SUGAM Number is sufficient.

SUGAM generation through SMS.

Average 1.20 Lakh SUGAM generated/day (83 SUGAM/minute)

E-sugam

E-Suvega

• Instead of filling up forms at checkposts and

officer then issuing each transit pass, the system

is now transformed as below -

• Before dispatch from origin, details now uploaded online with generation of a Unique No.

• On arrival at checkpost, this unique number is converted to a transit pass instantaneously by the officer, post verification using the system.

• e-Suvega conceived to - • Reduce hardship of transporters on one hand

• Prevent dumping of goods from other states to avoid tax, on the other hand.

E- SUVEGA

(Simply Upload about

VEhicle and Go Across)

3 2 4 7 6 8 5 1

Entry Check Post Exit - Check Post

9 10

Steps

1. Request 6. Acknowledging

2. Filling TP 7. Stamping

3. Stamping 8. Record Keeping

4. Storing 9. Send to Entry CP

5. Surrender 10. Match and Act

Process Before SUVEGA

Entry Check Post

Transporter

1

Data Centre

Satellite

Exit - Check Post

2

3

Steps

1. Request e-SUVEGA

2. Issue e-SUVEGA

3. Surrender e-SUVEGA

Process After SUVEGA

The registration process was made on line. Application online.

Processing fee by e-Payment

Uploading of scanned documents

Followed by visit by official

and then issue of certificate online.

Status of application and the process is informed by SMS and through website.

On an Average 5000+ online registrations are issued monthly.

Amendment to registration also through online.

Username and password created along with TIN and intimated through mobile for availing e-services

Traders no longer have to visit tax offices- online registration (e-VARDAN)

e-VARADI: Filing of returns is only online

All traders enabled to file monthly returns electronically.

Filing of erroneous returns ruled out.

Filing not possible unless payment of tax is made.

Achieved 100 % e-filing in 3 months of introduction of e-filing (July 2010)

4.5 Lakhs returns received every month.

Monitoring of defaulters and messaging system developed.

Analytic tools for analysis of dealers behavior also developed.

25

Highlights

•First of its kind in India where RBI is directly involved in the e-Payment process.

•Payment credited to Govt. on the very next day of payment

•Ease of verification of payment by the dealer anytime.

•Automatic reconciliation of payment with participating banks, RBI, Treasury and CTD.

•Even though e-payment has been made mandatory for payment of Rs 10,000 and above, more than 50 % of transactions are with less than payment Rs. 10,000

Status • Introduced in Apr 2010

• Interfaced with 21 banks

•Achieved 95 % of collection

•2 Lakhs transactions received every month

E-payment

RBI as an aggregator

Funds tracking from Dealer’s account to

Government’s account

Best practice recommended by RBI

e-Reconciliation

1. Initiate e-

payment

3. Make

payment 5. Print

Challan

2. Transfer payment details to

bank

4. Confirm payment

receipt

Commercial Taxes

System

Citizens

Bank 1

Bank 2

Bank 3

E-Payment -BPR

1. Transfer Transactions

data

2. Transfer

Transactions data

3. Transfer of realised

transactions data

Bank 1

Bank 2

Bank 3 Reserve Bank of India

Treasury Commercial Taxes

Department

ECEIPT

Receipt confirmation

Result Demonstration

e-Reconciliation Process

Conventional System CAS

– Totally opaque – nexus between the Assessment Officer and the trader.

– Pick and choose policy – as only 3 to 5% of traders were assessed.

– If the officer and the trader colluded it went unnoticed.

– Malpractices – ante-dating orders, ghost writing, demand suppression

No pick & choose. Assignment based on an algorithm.

Order to be uploaded before issue- a unique number assigned to each.

Each order is peer reviewed.

All revisions/appeals linked to the original order.

Malpractices - ghost writing, ante-dating, demand suppression have disappeared.

Knowledge Bank of 5.60 lakh orders already created

COMPREHENSIVE ASSESSMENT SYSTEM (CAS) - THE GAME CHANGER

No order is issued without getting the Unique CAS Number from system Digitization of All Orders from 01.04.2011 onwards e- Scrutiny- Selection of Case for Audit e-Assignment process from Audit officer to HQ Uploading of Preliminary and Final Reports/orders Peer Review of AO Review of AO by Middle/Senior Management- JC, Adcom,CCT Uploading of Appeal and Revision Orders-FAA/SAA/HC/SC Uploading of Internal & CAG Observations/Compliance Writing of Log Sheet for all the Audited Cases, till closure of file

By Using CAS number- status of post-assessment proceedings of any order can be Tracked/Monitored

Basic Features of e-CAS

First Appeal

Tribunal/

Second Appeal

High Court

Supreme Court

Intelligence Reports/Wild Card/Scrutiny

Commercial Taxes Department was the first to become fully Right to Services Act Compliant in the State.

The success rate is –98.7%

Services like generation of ‘C’ form, have been put on the automatic mode with no human intervention

The trader submits the request online – the computer verifies the details with its database – if the information is correct a form with all details duly filled in is generated and the trader can download it.

http://sakala.kar.nic.in/gsc_rpt

All 5 Principles of Right to Services have been adopted

1. Online information

2. Online request

3. Auto verification and approval

4. On time Delivery

5. Online Delivery

External Regulation under ‘Right to Services Act’

6.1

9.0

25.8

21.1

15.4 15.4

2008-09 2009-10 2010-2011 2011-2012 2012-2013 2013-14

Growth Rate in %

16629 18133

22803

27611

31876

36773

2008-09 2009-10 2010-2011 2011-2012 2012-2013 2013-14

Net Collections( ` in crore)

Efficient Tax Administration -There was a marked increase in revenue. Efficiency and & accountability of tax administration increased.

Outcomes

e_-PRERANA E-PELSOFT which includes

Profession Tax, Luxury tax, entertainment Tax, Betting Tax

•Other Initiatives

Fast Track Transportation Check posts became much more friendly.The delays at check posts were reduced

THE OUTCOMES

THE OUTCOMES

Advantage Trade About 0.5 lakh visits of traders saved per day. Zero scope for corruption.

Environment friendly Saves about two tons of paper per day. Saves waiting time and fuel for transporters