use of ict in vat administration k sinha_2.pdf · audit case . selection system . tax accounting ....

Use of Communication and Information Technology (CIT) in

VAT Administration

Dr. Sudip Kumar Sinha

Senior Joint Commissioner Sales Tax, Investigation and Tax Research Unit &

Consultant (Public Finance) Dept of Finance, Govt. of West Bengal.

The Economic Environment

Fiscal Policy

Legal Framework

The Executive

The Legislature

The Judiciary

Public Sector Institutions

Taxpayers

Stakeholders

Banks

Revenue Administration

The Revenue Administration Environment

INDIVIDUAL

INFORMAL ORGANIZATION

TASKS

FORMAL ORGANIZATION

ORGANIZATION LEVEL

UNIT LEVEL

INDIVIDUAL LEVEL

STRATEGY

ENVIRONMENT

RESOURCE

HISTORY

INPUT TRANSFORMATION PROCESS OUTPUT

THE CONGRUENCE MODEL

Courtesy : Jit B.S. Gill

Proposed CIT Architecture

Citizen Service

Revenue Management Functions

Support Functions

Online Web Portal Content Management Mobile Systems Integration IVR Based Systems Document Management System

Registration Processing Return Processing Refund Processing Audit Case Selection System Tax Accounting System

Management Information System

Courtesy : Satya N. Poddar, Ernst & Young

Data Warehousing Data Mining

Workflow Management Key Tax Payer Cell Management

Human Resource Management Personnel Info System Payroll Processing Public Key Infrastructure Collaboration Systems

Components of CIT

• Hardware – Computer

• Server • PC • Laptop

– Networking • LAN • WAN • MAN • Router • Switch/Hub

• Software – Operating System

• UNIX • LINUX • WINDOWS

– DBMS • Front End Tools/Browser • Middle Tier • Database Server

– ORACLE – SQL

Case Study – West Bengal

Host Based – 1989

Unix-UNIFY

Client-Server Architecture – 1996

Unix-ORACLE

Web-Based – 2003 Unix-ORACLE

Case Study – West Bengal Communication Technology Roadmap

Dial-up / ISDN

VSAT / ISDN/ Leased Line

Web Based VPN Network

UNDP Funded e-governance projects

Software Application Architecture

Registration Waybill

Return Tax Payment

•VAT Registration Number •Trade Name of Business •Nature of Business •Major Commodities •Bank Details •Warehouse Details

•Waybill Number •VAT Registration Number •Consignee Details •Consignor Details •Consignment Details •Transport Details •Entry/Exit Point Location

•VAT Registration Number •Return Period •Purchase Details •Input Tax Paid •Sales Details •Output Tax Details •Monthly Tax Breakup

•VAT Registration Number •Period of Payment •Monthly Tax Payment •Payment Mode Details

MIS Reports

• Return Defaulter List • Tax Payment Defaulter List • Mismatch of Purchase and Sales from Cross Checking

of related Dealers • Cross check of Import Statement from Waybill and

Return Databases • Cross check of Waybill and Transit Data with other

States’ Database • TINXSYS cross check for Central Forms/Transactions

Website of Directorate of Commercial Taxes, West Bengal

Using m-governance for Tax Administration

(Through SMS facility)

TIN- based search option

Waybill number based vehicle information and vice-versa

PAN-based search option Database Server

Data Exchange System

Dept 1

Port

al

CBEC Warehouse

Upload of data

Download of MIS Reports

Dept 2

Upload of data

Download of MIS Reports

Objectives 1. To capture overall picture of dealer (i.e.

Assessee/manufacturer/service provider ) including Returns filed by dealer, Sales/ Purchase Turnover, Opening/Closing Stock, Gross profit, commodity, Bank Account, Directors details etc.

2. To find out how many dealers are registered with each department. This will give an idea about dealer database with each department and comparison of it among different departments. This will give an idea of unregistered dealers with each department.

3. To get transaction wise data for proper tracking of transactions of dealers which will help to increase the tax net and revenue of different Tax Agencies.

MIS Report – Sales Tax Year VAT Value Sales/GR

as per ITR Value of Clearance as per ER1

Gross Amt received as per ST3

Total Consolidated Imports as per Customs

Value % gr. YOY

Value % gr. YOY

Value % gr. YOY

Value % gr. YOY

Value % gr. YOY

Value % gr. YOY

2008-09

2009-10

2010-11

Proposed Format of Data Capture

CUSTOMS: IEC Registration Data

CUSTOMS - IEC Sr. No. Field Data Type Periodicity Source

1 PAN No. AN

Monthly IEC registration data

2 IEC No. N

3 Name of Importer/ Exporter

A

4 Addresses AN

5 Telephone No. N

6 Mobile No. N

7 Email ID AN

8 Name of Bank, Branch and AC No

AN

CUSTOMS: Bill of Entry

Sr. No. Field

Data Type

Field No. Source Periodicity

1 Import Dept Sr. No N 1. Bill of Entry

Monthly

2 Date N

3 CHA Code N

4 Importer Code (IEC) N 5 Importers Name and Address AN 6 Bill of Lading and Date A 7 Quantity /Weights N 5 8 Custom Tariff Heading (HSN code) AN 7 9 Assessable value (By Customs) N 9

10 Rate N 10 11 Additional Duty N 15 12 Total Duty N 16 13 Value debited to License N 14 Import License No. N 15 Bank Draft AN

16 PAN N IEC Data 2. IEC Data

17 BIN of Importer

AN 3. Daily Trade Return (Circular No. 19/2009)


Excise: Registration Data

Sr. No. Field Data Type


1 Registration No. AN

Form A1

Monthly

2 Name of Assessee N 1

3 PAN A 2

4 Category AN 3

5 Constitution of Business N 4

6 Address of Business Premises AN

5

7 E mail address AN 5 xii

8 Address of Head Office AN 9

9 Telephone No. N

10 Mobile No. N

11 Authorise person Details AN 10

12 Details of Bank Account AN 11


Excise: Returns



1 Registration No. AN

Form A1

Monthly

2 Name of Assessee N 1

3 PAN A 2

4 Category AN 3

5 Constitution of Business N 4

6 Address of Business Premises AN

5

7 E mail address AN 5 xii

8 Address of Head Office AN 9

9 Telephone No. N

10 Mobile No. N

11 Authorise person Details AN 10

12 Details of Bank Account AN 11


Service Tax: Registration

Service Tax


Field No. Periodicity Source

1 Name of Applicant A 1 a Monthly ST 1

2 Address of Applicant AN 1 b 3 PAN 2 b

4 Constitution of Assesses

A 3 a

5 Name of Address of Propa/Part/Director

A 3 b

6 Telephone N

7 Mobile N

8 Email ID AN

9 Category of registrant A 4

10 Name and address of Authorised Signatory.

AN 8


Service Tax: Returns

Fields from Returns



1 Financial Period Date

Monthly Form ST3 (Return)

2 Name of Assessee N 2 A 3 STC No N 2 B

4 Constitution of Assessee

AN 2 D

5 Name of Taxable Service

AN 3 A 1

6 Gross Amount Received / Paid

N 3 I a

7 Taxable Value N 3 I e

8 Value of Service Tax payable

N 3 I g

9 CENVAT Credit Taken N 5 B

10 CENVAT Credit adjusted

N 5 B

11 Service Tax Paid N 4 A


Income Tax: Registration

Income Tax Registration

Sr. No. Field

Data Type


1 Name of Applicant A 1 Form No 49 A.

Monthly

2 Address of Applicant AN 3

3 Status of Applicant AN 9

4 Registration No. A 11

5 Telephone No

N

6 Mobile No.

N

7 E Mail ID

AN

8 Name and Address of Representative.

A 14


Income Tax: Return (ITR 4)

Income Tax: Return



1 Period Date Part A Gen

Annually Income

Tax Returns

for ITR 4

2 Name and address AN

3 PAN AN

4 Email N

5 Audit Information A

6 Nature of Business N

7 Sales/ Gross Receipts N Part A P & L 8 Purchases N

9 Opening Stock N

10 Closing Stock N

11 Profit before tax N

12 Provision of current tax N


AN



Income Tax: Return




Income Tax

Returns for

ITR 5

2 Name and address AN 3 PAN AN Annually 4 Email N 5 Audit Information A 6 Nature of Business N

7 Partner or Member’s Information

AN


AN


11 Opening Stock N 12 Closing Stock N 13 Profit before tax N 14 Provision of current tax N



Income Tax: Return




Income Tax

Returns for

ITR 6

2 Name and address AN 3 PAN AN Annually 4 Email N 5 Audit Information A 6 Nature of Company N 7 Key Persons AN


AN


11 Opening Stock N 12 Closing Stock N 13 Profit before tax N 14 Provision of current tax N


Sales Tax: Registration Data

Sales Tax Sr. No. Field Data

Type Field No. Periodicity Source

1 TIN N Form 101 footer

Monthly

Form 101 (Registration)

2 Name Of Business A 1 3 PAN AN 2

4 Constitution AN 3 5 Address A 12 6 Telephone No. N 12

7 Mobile No. N 12

8 Email ID AN 12 9 Name of Bank,

Branch and AC No AN 16

10 BSR/ MICR Code AN 16


Sales Tax: Returns



1 TIN No. AN 1

Monthly

Form 231 (Return)

2 Sales Turnover N 5a

3 Purchase Turnover N 7a

4 Tax collected N 6

5 ITC claimed N 9

6 Tax paid N 10


DEBP Licenses Data of DGFT

Following Data Format is to get data on IEC issued and Sale Transaction of Licenses issued by DGFT

(DEBP/DFRC). The Sale of these licenses is taxable under MVAT Act 2002.

DGFT : DEPB


Periodicity Source

1 License Number N

Quarterly DGFT/ DEPB data

2 IEC code N

3 PAN AN

4 Name of Importer AN

5 Type of license AN

6 Amount of license N

7 Value debited to License N


MIS Report for Sales Tax: Illustrative

Period: From 4/1/2008 To: 7/1/2008

S.No TIN No. PAN No. IEC Code Name of Dealer

Direct Imports shown in VAT return

Assessible Value

Custom Duty

Total Value (7+8)

Difference (6-9)

1 2 3 4 5 6 7 8 9 10

Figures 19362514026

AMSTH4536J

303066679 XYZ 920000 800000 120000 920000 0

Source Form 108 of VAT

Form 108 of VAT

Bill of Entry from Customs

Form 108 of VAT

7C in Form 231 of VAT Return

Bill of Entry

Bill of Entry

WB

Master Data

Master Data Do Master Data

15D in Form 14 of VAT Return Do Do

Check:

For West Bengal Dealers, Column 10 should always be >=0. If Value of imported goods shown in Sales Tax is less than what is shown in Customs, Then the dealer is evading Sales Tax. Hence, the Case can be sent for Investigation / Audit

MIS Report – Sales Tax

Dealer Address TIN ER No. STR No. PAN IEC

Dealer 1

Dealer 2

Dealer 3

Commodity Wise Import

Commodity

Import Thru Port (From Customs)

Import Thru Airport (From Customs)

Import Thru Road (From VAT waybill)

Commodity 1

Commodity 2

Commodity 3

Commodity 4

Input Credit Analytics

Dealer Excise Duty (Gross)

CENVAT Credit

Credit/ED (%)

VAT (Gross)

ITC ITC/VAT (%)

(1) (2) (3) (3) (4) (5)

Dealer 1

Dealer 2

Dealer 3

Dealer 4

Dealer 5

Dealer 6

Commodity Tracking

Commodity

Period Excise Duty

% Growth YOY

Customs Duty

% Growth YOY

VAT % Growth YOY

2008-09

2009-10

2010-11

Business Intelligence Support

• Captive Analytics – Mismatch MIS reports – Input Credit Behavior

• Triggers – Commodity Tracking

• Integration – FIU / CSO / NSS / ROC / Banks

Challenges

• How to bring the Informal Sector in the tax net • Development of a uniform commodity code ( aligned to HSN code) • Capturing real time data • Identification of bogus dealers • Capacity Building in Tax Administration

THANK YOU

[email protected]

use of ict in vat administration k sinha_2.pdf · audit case . selection system . tax accounting ....

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