Reforming the Taxation System in Nagaland
Through “Taxsoft”
Presentation by:
Asangba Chuba Ao
Commissioner of Taxes
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Department of Taxes, Nagaland
Introduction to Nagaland
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Department of Taxes, 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 Tax
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Department of Taxes, Nagaland
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
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Department of Taxes, Nagaland
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
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Department of Taxes, Nagaland
The Taxsoft Project: An overview
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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’
System Admin
e - Registration
e–
Waybills
e-TDS
e - Returns
e - Payments
e-Transit Pass
e - CST
e - Sales &
Purchase
e-Audit
e-Challan
Online
Helpdesk
MIS Reports
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Department of Taxes, Nagaland
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
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Department of Taxes, Nagaland
e Returns
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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
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Department of Taxes, Nagaland
e Payment
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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
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Department of Taxes, Nagaland
e Waybill
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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
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Department of Taxes, Nagaland
e- Waybill: Cross verification at Check posts
Enter & Submit
Waybill Details
Selling Dealer/ Share the OTP
Transporter
Dealer
Logs into
website
Send SMS alert to
dealer along with
OTP & Waybill No
Checkpost
Authority
Login using TIN
No & OTP
Logs into Website
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Generation of
Waybill No &
One Time Password
(OTP) by the system
Update
Transporter/
Vehicle details
Print Waybill
Enter Waybill No
given by the
transporter
Verify Waybill
& allows the
Vehicle to Pass
Department of Taxes, Nagaland
e CST
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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
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Department of Taxes, Nagaland
‘Taxsoft’ Highlights
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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
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Department of Taxes, Nagaland
‘Taxsoft’ Highlights (Continued..)
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Inter Module linkages has reduced the scope for entering
incorrect information
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All Service Requests/ status can be tracked online
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Acknowledgement/ confirmation alerts are provided in
the form of SMS
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Department of Taxes, Nagaland
Uniqueness of ‘Taxsoft’
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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
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Department of Taxes, Nagaland
Uniqueness of ‘Taxsoft’ (Continued…)
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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 eRegistration (with PAN), e-Return ( for turnover >Rs
40 lakhs), e-Waybill and e-CST mandatory
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Department of Taxes, Nagaland
Website Demo
www.nagalandtax.nic.in
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Department of Taxes, Nagaland
e - Services
Demo for Training & UAT
Waybill
Invoice Upload
CST Forms
TDS Entry
Refund & Composition
Scheme
Return Filing
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Department of Taxes, Nagaland
Achievements
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 -payment
Tax collections from VAT increased by 40.5% in
2014-15
Current trends show an increase in revenue
fromVAT by around 50% in the first quarter of
2015-16
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Department of Taxes, Nagaland
Achievements (Continued…)
No of Online CST Forms: 20319
No of Online Waybills :67097
No of Offline Forms uploaded: 94635
Transactions worth Rs 2850 Crores captured in
2014-15
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
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Department of Taxes, Nagaland
Key Realised Benefits – 1 / 3
Pre – Taxsoft
Post Taxsoft
Multiple visits to Unit
Offices/Banks/Treasury 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
Information related to
Waybills & CST Forms not
captured
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• eWaybills can be generated on
demand from anywhere
• CST forms issuance have defined
timeline- no delay
All information related to
Waybills & CST Forms captured
and stored digitally
Department of Taxes, Nagaland
Key Realised Benefits – 2 /3
Pre – Taxsoft
Errors in Returns
forms
Lack of information
sharing with Dealers
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Post Taxsoft
The auto – calculate feature in
the e – Returns form ensures
error free return filing by
Dealers
• All public information
displayed in the website
• Status tracking of service
request through unique
Acknowledgement No
Department of Taxes, Nagaland
Key Realised Benefits – 3/3
Pre – Taxsoft
Inefficient manner
of tracking Dealer
activities
Absence of an efficient
mechanism to cross –
check information
provided by Dealers
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Post Taxsoft
• Higher Efficiency in tracking
Dealer activity through MIS
reports generated by the system
• History of Dealer transaction
available on a click
Validation of information shared by
Dealers is possible as modules in
TaxSoft are interlinked
Department of Taxes, Nagaland
Challenges in Implementation
Changing the mindset of almost all stakeholdersdealers, 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.
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The flagship e-Governance reform in the state
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Department of Taxes, Nagaland
Thank you…
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Department of Taxes, Nagaland