Making IT all lil un-taxing at Karnataka Taxation

BANGALORE, INDIA:

If you really, really want to go someplace then, anywhere is pretty much walking distance.

But can it be as easy as a walk in the park when you ask some business firms to enter minute, specific, very-granular level of transaction details in a new format and for almost every invoice rung at the cash register?

Ask Aravind K S from Tally Solutions and he agrees that India is a developing nation with strong behavior nuances. There is a fascinating mix of rigidity and flexibility here, he reassures. "As long as you can deliver both aspects in a safe and compatible environment, nothing is a far leap."

Aravind is also someone who labels VAT the single most revolutionary change the country has seen after the very struggle of Independence. VAT, he opines, has completely transformed nation's ability and financial fabric.

In fact as the topic segues into the challenge of tax evasion in the country, he applauds the government's policy and design framework. "It is beautifully set up and if one pays for transactions as prescribed, everything can run superbly smooth without any tax-bleeds."

Is that a tourniquet that EUPASS was aspired to be when Karnataka department started a drive for Electronic Uploading of Purchase and Sales Statements? Does technology's role help things go faster, sharper and without any holes lurking in hidden nooks? Or does it mean a new challenge altogether when it comes down to inoculating the complete system with IT?

We ask a happy, excited, hands-on (and well-nuanced about finer insights) Dr. B V Murali Krishna, Joint Commissioner of Commercial Taxes, and captain of the newly-sculpted E-Audit unit at Karnataka Taxation to take us through this Tax operation.

Tell us something about this initiative first

Earlier, returns were consolidated every month and were filed. But now with EUPASS, we are asking businesses to submit each-invoice-wise data to be entered for every sale and purchase. That's, as it sounds, a big jump. The idea from our end is to simplify and consolidate the whole field. No paper filing at office and faster returns for businesses are an advantage that can be seen as outcomes for users also. One can do the complete task sitting at his shop or office directly and it enables to verify taxes paid and hence accelerate returns. Earlier verification was done manually but now this would be not only a big shift on timeliness but also on transparency and efficiency.

And it also helps to nab tax evasion?

Yes. In fact, it would increase tax collections because all actual are captured and declared through automated data. There is not much room for any slippage and as long as the information matches electronically, even disputes can be sorted better and faster.

How is the adoption phase going?

We had targeted some 1.1 lakh dealers as targeted population. For May 2014, 52,000 dealers were already uploading; for June, the figure next was 44,000 dealers and in July, we saw 14,000 dealers get in the process. We have conducted proper awareness programmes on one-to-one level for instance with 30,000 dealers in the last 40 days. We are working closely with trade association bodies and we are clear that we want an inclusive approach in this initiative. The participation response has been tremendous and with 50 per cent compliance already, we are sure of reaching 100 per cent levels in next two months.

Did it translate into any specific tweaks in the solution or any particular resistance areas?

The exercise has been done with help from NIC (National Informatics Centre) that works at back-end and with our domain-related expertise, it works well as a team. Tally and other software providers had a role to play in areas of XML file conversion, which is critical if dealer chooses to not directly enter data on our website and instead wants to upload an XML file. Now with in-built validations, things are better. Talking of resistance, yes, there was some skepticism earlier in the industry, but that's a good spot to grab and turn it into awareness and participation. We do not want to appear as just a regulator but as a friendly-facilitator.

With this experience and all the debate around VAT being too complicated, how do you observe the role of IT?

For any complicated change, technology is a good answer specially when data has to be collated at a new scale and with high granularity. Ensuring absence of avoidance gaps has its own snowball effect on the whole cycle. IT works well with application of mind and can certainly give a new dimension to the tax system.

Are you happy to be in the pioneer league?

In a recent media report Accenture rankings were cited where different State Government electronic initiatives were stacked up. We are proud to be rate as best department for indirect tax initiatives and we have also got two national awards and recognitions for best practice in e-governance category. This initiative is surely a strong basis for proposed GST shift. This electronic database would be an excellent bridge between the past and future as I see it.