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TCS develops VAT software

V. Rishi Kumar

The TCS' Global S-Governance Centre located at Hyderabad has developed this application software framework for administering VAT for State Governments. The system has been tested and currently is being implemented for the Commercial Taxes Department of the Government of Andhra Pradesh and for the Assam Government.

HYDERABAD, Dec. 22

TATA Consultancy Services (TCS) has developed a VAT (value added tax) software framework for administering the new tax regime planned to be implemented by States from April, 2003 as per the decision of the Union Finance Ministry.

The company is guiding several State Governments in their efforts towards transition from the current sales tax system. This process would mean a business opportunity of over Rs 300 crore.

The Global Head of S-Governance group in TCS, Mr V. Chandrasekhar, told Business Line that the current value added tax package, developed by TCS was in line with the mandate given by the Chief Ministers to usher a VAT regime. This is to be based on principles of tax invoice method, consumption-based VAT and conformance to global best practices.

The TCS' Global S-Governance Centre located at Hyderabad has developed this application software framework for administering VAT for State Governments. The system has been tested and currently is being implemented for the Commercial Taxes Department of the Government of Andhra Pradesh and for the Assam Government. TCS is in parleys with several other States including Delhi, Goa and Pondicherry.

``The opportunity is huge. It is a matter of pride we will be ushering in transparency and second-generation fiscal reforms through this initiative. We are part of the process in the transition towards this new tax system that is backed by technology developed in-house by the TCS. Though we are ready, several States feel that there may be yet another postponement in terms of extending the deadline for its implementation. In fact, what was to be implemented from April 1, 2002 has been postponed to April 2003. The State Governments will have to decide on the timeframe and it would be possible to implement the project in 4 to 6 weeks," he said.

The State Governments can use the software package for VAT administration, with very little customisation in a short time. The software built with the understanding of best practices as well as current tax administration of States is aimed at facilitating easier adoption in the prevailing conditions. This is essential because VAT regime will be adopted across the country.

The VAT system will replace the current taxation systems in all States including multi-point taxation, eliminates cascading effects, ushers transparency while providing for input tax rebate and uniformity in taxation. Further, the system was self-policing and designed to be taxpayer friendly while expanding the tax base in the long run by plugging the loopholes in the system, Mr Chandrasekhar said.

This Web-enabled application software is developed using J2EE (Java to Enterprise Edition) development framework. It has a powerful workflow mechanism and automated assessment system, where the system proactively facilitates tax administration and allows the focus of tax administration to shift from mundane tasks like processing, assessing, notifying, account balancing to efficient monitoring of revenue collection and deploying resources in audit activities.

It also helps in revenue and business trend analysis allowing tax administrators to effectively plug revenue leakage. The software has a check post information system for monitoring intra and interstate goods management, turnover tax and central sales tax functionality, he said.

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