Reforming the Taxation System in Nagaland Through “Taxsoft” Presentation by: Asangba Chuba Ao Commissioner of Taxes Department of Taxes, Nagaland 1

Reforming the Taxation System in

Nagaland Through “Taxsoft”

Presentation by:

Asangba Chuba AoCommissioner of Taxes

Department of Taxes, Nagaland1


Introduction to Nagaland

Nagaland: A Bird’s Eye View One of the smallest states in India: 16,579 sq km Predominantly Tribal Population: 19,78,502

( Census 2011) Developmentally backward due to remoteness,

lack of proper infrastructure, prolonged insurgency, untapped resources, hilly and difficult terrain

No major industry , economy is largely agro based Consumers wholly dependent on goods imported

from other states and abroad IT connectivity is also very weak, specially in the

hilly areas People largely unaware about taxation systems.

Tribals exempted from Income TaxDepartment of Taxes, Nagaland3

Taxes: The backbone of state finances The department collected about Rs 325 crores

as revenue for the state in 2014-15 Contributes about 60% of state’s internal

revenue VAT and Sales Tax are major components About 10000 registered dealers collect tax on

behalf of the government and remit it The department has 9 offices spread all over

the state with workforce of 270 officers and staff

“Taxsoft” is one of the pioneering e Governance initiatives in the state


Deficiencies of the earlier “Manual” system

Cost of compliance was very heavy for tax payers- frequent visits to offices, harassment, delays

Scope for connivance of tax officials with tax payers due to lack of controls/monitoring leading to corruption and evasion

Inability of the system to capture information and channelize it purposefully and effectively

Paper based systems with inbuilt inefficiencies and opaqueness.

No effective mechanism to track volume of transactions taking place- as a whole, dealer wise, commodity wise etc

Large scale misuse of manual statutory forms such as declaration forms leading to evasion of tax


The Taxsoft Project: An overview

Mission Mode Project under NeGP funded by GoI and State Govt. in 90:10 ratio

Aims to simplify tax administration & compliance through ICT intervention

Customization & Implementation of application called Taxsoft developed in collaboration with NIC, Karnataka.

Website: www.nagalandtax.nic.in

www.nagalandtax.nic.in

Modules of ‘Taxsoft’


e - Registration

System Admin e - Returns

e – Waybills e - CST

e - Sales & Purchase

e-Audit e-Challan e-TDS

e - Payments

e-Transit Pass

Online Helpdesk

MIS Reports

Service Delivery Channels

Website; Application for Services Status Tracking Certificate / Forms Printing Other Information

Facilitation Centers; Application for Services Status Tracking Certificate / Forms Printing Other Information

Mobile; SMS Alerts Payment Confirmation Service related updates – Eg.

Waybill Password

www.nagalandtax.nic.in

e Registration Mandatory online registration Traders no longer have to visit Tax offices for

registration. This has reduced unnecessary tax office-tax payer interface.

Issue of certificates also made online Application status can be tracked Confirmation of registration through SMS with

allotted TIN PAN- Permanent Account Number for Income

Tax purposes also made mandatory for registration under VAT- groundwork for GST


e Returns All traders can file returns electronically Mandatory for tax payers with turnover

above Rs 40 lakhs per annum Auto calculation of tax and interest inbuilt

into the system Provision for filing revised returns Auto generated SMS alert sent when return

is due


e Payment Payment of tax in cash/ cheque full of

problems especially for big tax payers Security issue was/is a major concern Weak Treasury-Bank linkages led to delays,

harassment, red tape Reconciliation with the department sometimes

took months Payment process time and effort drastically

reduced SMS alert with BURN on successful transaction Reconciliation process is done in real time


e Waybill Every goods carrier had to be accompanied by

a waybill Blank waybills issued by tax offices These filled waybills were collected at the

check post Number of documents collected was very

large making it impossible to cross verify Non surrender of these waybills would benefit

dealers immensely leading to tax evasion Now, all transaction details captured online Can be verified from anywhere Quick transit at check posts Department of Taxes, Nagaland12


Logs into website

Enter & Submit Waybill Details

Login using TIN No & OTP

Update Transporter/

Vehicle details

Print Waybill

Generation of Waybill No & One Time Password (OTP) by the system

Send SMS alert to dealer along

with OTP & Waybill No

Logs into Website

Enter Waybill No given by

the transporter

Verify Waybill & allows the Vehicle to

Pass

Deale

rS

ellin

g D

eale

r/T

rans

port

er

Check

pos

t A

utho

rity

e- Waybill: Cross verification at Check posts

Sha

re t

he O

TP

e CST Large scale misuse of statutory forms which would give

concessional rates of tax to the tax payer Issue of forms beset with problems such as speed

money, issuance to unregistered agencies, issue in one firms name and use by another etc.

Utilisation certificates were hardly submitted and even if submitted cross verification was next to impossible and time consuming

Present system ensures that the trader receiving the consignment applies online with all details of the transactions

The details of the form are kept in the public domain for anyone to verify authenticity

No need for verification as the transaction gets debited to both tax payers accounts.

Self policing system


‘Taxsoft’ Highlights

Web Based Application Security and Authentication – Unique User IDs

and Passwords are provided to Dealers and Officials to manage and operate their accounts

Entire cycle of Return filing, scrutiny and disposal is automated as all calculations are done by the system during Return Entry

Waybills are generated with One Time Passwords (OTP). Interface is provided to Transporters /Selling dealers to update information

MIS Reports are available in every Module at each level of users


‘Taxsoft’ Highlights (Continued..)

Inter Module linkages has reduced the scope for entering incorrect information

All Service Requests/ status can be tracked online

Acknowledgement/ confirmation alerts are provided in the form of SMS


Uniqueness of ‘Taxsoft’

e-Registration ,e-Payment, e-Returns, e- Waybills, e-CST have also been incorporated under Petroleum Tax and Amusement Tax Acts

Return Module is linked to Payment Module Facility for issuance of notices to erring Dealers Online Forms cannot be generated without

entering transaction details in advance thus making dealer’s data transparent

Defined Timeline for auto approval of CST Forms


Uniqueness of ‘Taxsoft’ (Continued…)

Facility to update details related to Part Consignments & Transhipments in Waybills and Transit Passes

Two-Way SMS Facility has been provided to verify genuineness of any Form

Any person can verify TIN, Waybills, and CST Forms either issued online or offline (pre Taxsoft)

Nagaland first state in the North East to make e-Registration (with PAN), e-Return ( for turnover >Rs 40 lakhs), e-Waybill and e-CST mandatory


Website Demowww.nagalandtax.nic.in


e - Services

Demo for Training & UAT


TDS Entry

Return Filing

Waybill

CST Forms

Refund & Composition Scheme

Invoice Upload


A Total of 10422 e- Registrations done VAT – 5821, CST– 4504, Petroleum -90 , Amusement -7

Revenue collection of Rs. 240 Crs through online payments. 33% of all tax payment in 2014-15 made through e -paymentTax collections from VAT increased by 40.5% in 2014-15Current trends show an increase in revenue fromVAT by around 50% in the first quarter of 2015-16

Achievements

Achievements (Continued…)


9 Private Agencies authorized to operate as Dealer Facilitation Centers(DFC)

Dealers Workshop cum Training conducted throughout the state and a total of 6000+ Dealers trained all over the State

Key Realised Benefits – 1 / 3

Pre – Taxsoft Post Taxsoft


Information related to Waybills & CST Forms

not captured

All information related to Waybills & CST Forms captured and stored

digitally

Multiple visits to Unit Offices/Banks/Treasur

y by Dealers for making Tax payments

•e – Payment can be made by Dealers from their offices / homes which takes barely 5 minutes

Mandatory visit to Unit office by Dealers for obtaining Waybills,

CST Forms

•eWaybills can be generated on demand from anywhere

•CST forms issuance have defined timeline- no delay

Key Realised Benefits – 2 /3



Errors in Returns forms

The auto – calculate feature in the e –

Returns form ensures error free return filing by

Dealers

Lack of information sharing with

Dealers

•All public information displayed in the website

•Status tracking of service request through unique Acknowledgement No

Key Realised Benefits – 3/3



Inefficient manner of

tracking Dealer activities

•Higher Efficiency in tracking Dealer activity through MIS reports generated by the system

•History of Dealer transaction available on a click

Absence of an efficient

mechanism to cross – check information provided by

Dealers

Validation of information shared by Dealers is

possible as modules in TaxSoft are interlinked

Efficie

ncy

Challenges in Implementation Changing the mindset of almost all

stakeholders- dealers, trade bodies, tax officials, political executive

Overcoming low levels of understanding taxation especially among local traders

Poor IT connectivity Pioneering e-Governance initiative- initially

fraught with doubt and cynicism…mostly overcome, some ongoing.

The flagship e-Governance reform in the state


Thank you…


Documents

Reforming the Taxation System in Nagaland Through “Taxsoft” Presentation by: Asangba Chuba Ao Commissioner of Taxes Department of Taxes, Nagaland 1