commercial tax department of state of kerala, india tax department of state of kerala, india report...
TRANSCRIPT
Impact Assessment of Tax Automation of
Commercial Tax Department of State of
Kerala, India
Report
December 13, 2010
Impact assessment of tax automation of CTD, Kerala I Page 3 of 105
Table of Contents
1 EXECUTIVE SUMMARY ................................................................................................................................. 10
1.1 IMPACT ASSESSMENT OF KVATIS- COMMERCIAL TAX DEPARTMENT ......................................................................... 10
1.2 IMPACT ASSESSMENT OF KVATIS- EMPLOYEES ..................................................................................................... 13
1.3 IMPACT ASSESSMENT OF KVATIS- DEALERS AND PRACTITIONERS ............................................................................. 13
2 INTRODUCTION ........................................................................................................................................... 17
3 APPROACH AND METHODOLOGY ................................................................................................................ 19
3.1 SAMPLING PLAN, SAMPLING SIZE AND PROFILE ..................................................................................................... 19
3.1.1 Dealers /Tax payers ............................................................................................................................... 19
3.1.2 Tax practitioners .................................................................................................................................... 21
3.1.3 Employees of the Commercial Tax Department .................................................................................... 22
3.2 PILOT TESTING AND VALIDATION OF RESEARCH INSTRUMENTS .................................................................................. 23
4 KERALA VALUE ADDED TAX INFORMATION SYSTEM ................................................................................... 24
4.1 ABOUT THE DEPARTMENT ................................................................................................................................. 24
4.2 NEED FOR IMPLEMENTATION OF KVATIS............................................................................................................. 25
4.2.1 Dealers perspective ............................................................................................................................... 27
4.2.2 Department’s perspective ..................................................................................................................... 27
4.3 KVATIS ........................................................................................................................................................ 29
4.3.1 Software Modules .................................................................................................................................. 29
4.4 OBJECTIVES AND GOALS OF KVATIS ................................................................................................................... 30
4.5 ACHIEVEMENTS / OUTCOMES OF THE PROJECT ...................................................................................................... 31
4.5.1 Dealer’s perspective .............................................................................................................................. 31
4.5.2 CTD’s perspective .................................................................................................................................. 32
4.5.3 Awards and recognitions ....................................................................................................................... 34
4.6 GEOGRAPHIC AND FUNCTIONAL COVERAGE OF KVATIS .......................................................................................... 35
4.7 HISTORY OF EVOLUTION ................................................................................................................................... 35
4.7.1 Phases of Implementation- Milestones ................................................................................................. 36
4.8 THE VISIONARY’S OF KVATIS- THE TOP MANAGEMENT .......................................................................................... 39
4.9 STAKEHOLDERS ............................................................................................................................................... 40
4.9.1 Technical Committee ............................................................................................................................. 40
Impact assessment of tax automation of CTD, Kerala I Page 4 of 105
4.9.2 IT Management Cell ............................................................................................................................... 40
4.9.3 Gulati Institute of finance and taxation (GIFT) ...................................................................................... 40
4.9.4 Software /Hardware and Network Vendors .......................................................................................... 41
4.9.5 Kerala State IT Mission........................................................................................................................... 41
4.9.6 VAT Consultative Committee (VCC) ....................................................................................................... 41
4.9.7 Akshaya Kendras .................................................................................................................................... 41
4.9.8 Dealers ................................................................................................................................................... 42
4.9.9 Sales Tax Practitioners /CA’s /Law Agents ............................................................................................. 42
5 IMPLEMENTATION FRAMEWORK ................................................................................................................ 42
5.1 CAPACITY BUILDING INITIATIVES ......................................................................................................................... 42
5.1.1 Training Initiatives ................................................................................................................................. 42
5.1.2 Investments on Training ........................................................................................................................ 42
5.1.3 Investments in IT .................................................................................................................................... 44
5.1.4 Investment in awareness programs and communication plans ............................................................ 46
5.1.5 Communication Plans- Via Government Orders .................................................................................... 47
5.2 ORGANIZATIONAL STRUCTURE OF CTD PRESENT/ PRIOR TO KVATIS ......................................................................... 48
5.2.1 Organisational chart before computerization ....................................................................................... 48
5.2.2 Organisational Structure after KVATIS/Computerization ...................................................................... 48
5.2.3 Roles and responsibilities of ITMC ......................................................................................................... 49
6 IMPACT ASSESSMENT FRAMEWORK ........................................................................................................... 50
6.1 IMPACT ASSESSMENT FOR TAX PAYERS AND AGENTS ............................................................................................... 50
6.1.1 Quantitative analysis ............................................................................................................................. 50
6.2 IMPACT ASSESSMENT FOR EMPLOYEES OF COMMERCIAL TAX DEPARTMENT ................................................................ 51
6.2.1 Quantitative Analysis ............................................................................................................................. 51
6.2.2 Qualitative Analysis................................................................................................................................ 51
6.3 IMPACT ASSESSMENT FOR COMMERCIAL TAX DEPARTMENT .................................................................................... 52
6.3.1 Other quantitative key statistics post automation ................................................................................ 52
7 IMPACT ASSESSMENT OF KVATIS ................................................................................................................ 53
7.1 DEALERS AND TAX PRACTITIONERS ...................................................................................................................... 53
7.1.1 Economic Cost Impact ........................................................................................................................... 53
7.1.2 Better Governance and Service levels ................................................................................................... 55
7.1.3 Increase in number of clients for practitioners ..................................................................................... 56
7.1.4 Effectiveness of KVATIS- Dealers and practitioners ............................................................................... 57
Impact assessment of tax automation of CTD, Kerala I Page 5 of 105
7.1.5 Factors responsible for adoption of KVATIS .......................................................................................... 58
7.1.6 Impact of Awareness programmes carried out by department ............................................................ 59
7.2 EMPLOYEES OF COMMERCIAL TAX DEPARTMENT .................................................................................................... 61
7.2.1 Better Governance ................................................................................................................................. 61
7.2.2 Contribution to organizational goals ..................................................................................................... 63
7.2.3 Employee productivity and morale........................................................................................................ 64
7.2.4 Effectiveness of each parameter KVATIS – Employees .......................................................................... 65
7.2.5 Training effectiveness ............................................................................................................................ 65
7.3 OVERALL RATING OF KVATIS ............................................................................................................................ 66
7.4 COMMERCIAL TAX DEPARTMENT ....................................................................................................................... 67
7.4.1 Increase in revenue collection ............................................................................................................... 67
7.4.2 Month wise revenue collection for the last 3 years .............................................................................. 68
7.4.3 Increase in tax base (number of returns filed) ...................................................................................... 69
7.4.4 Increase in the number of services availed ........................................................................................... 70
7.4.5 Trend in online vs Offline payment - Based on the amount of transactions per year ........................... 71
7.4.6 Trend in interstate transactions ............................................................................................................ 71
7.4.7 Fund utilized for Akshaya Kendra- Filing of Returns .............................................................................. 72
7.4.8 Return per employee ............................................................................................................................. 73
7.4.9 Employee productivity ........................................................................................................................... 73
7.4.10 User friendliness of KVATIS system ................................................................................................... 74
7.5 OTHER KEY STATISTICS ...................................................................................................................................... 75
7.5.1 VAT Helpline - effectives and support ................................................................................................... 75
7.5.2 Website details ...................................................................................................................................... 75
8 CHALLENGES FACED AND MEASURES TAKEN ............................................................................................... 77
8.1.1 Non-availability of digitized dealer data ................................................................................................ 77
8.1.2 Data Accuracy ........................................................................................................................................ 77
8.1.3 Resistance from stakeholders - employees ........................................................................................... 77
8.1.4 Digital divide among trader community ................................................................................................ 77
8.1.5 Digital Divide among officers ................................................................................................................. 77
8.1.6 Huge number of trading commodities................................................................................................... 78
8.1.7 Implementation of e-Payment............................................................................................................... 78
8.1.8 Multiple returns for the same period .................................................................................................... 78
9 AREAS OF IMPROVEMENT FOR KVATIS ....................................................................................................... 79
9.1.1 Technical Issues ..................................................................................................................................... 79
Impact assessment of tax automation of CTD, Kerala I Page 6 of 105
9.1.2 Refund Mechanism ................................................................................................................................ 79
9.1.3 Hardcopy submission ............................................................................................................................. 79
10 REFERENCES ................................................................................................................................................ 80
11 ANNEXURE .................................................................................................................................................. 81
Standard limitation - Restriction on use of reports
This report is intended solely for the information and use of the management of the Gulati institute of
Finance and Taxation (GIFT) and is not intended to be and should not be used by anyone other than
these specified parties. Ernst & Young therefore assumes no responsibility to any user of the report other
than GIFT. Any other persons who choose to rely on our report do so entirely at their own risk
Impact assessment of tax automation of CTD, Kerala I Page 7 of 105
Acknowledgement
The KVATIS Mission Mode Project holds great promise for the majority masses of the state as it aims at
streamlining the delivery of government services through online services. This is a one of its kind nation-
wide IT initiative initiated by Government of India (GoI) under the National e-Governance Plan (NeGP).
This was established for bringing a certain degree of standardization across states with respect to
Commercial Tax administration and to come up with streamlined citizen-centric, service-oriented
processes.
Ernst & Young Pvt. Ltd along with Gulati institute of management has done a collaborative study of the
impact of KVATIS on taxpayers, employees and the department. We would like to express its gratitude
towards all the government officials of Commercial Tax Department for their kind support and guidance
during the course of field study.
We would like to acknowledge, in particular, the contribution of the following officials for their extensive
co-operation, valuable insights and continued involvement:
State / Department Level:
Mr. Suman Billa , Commissioner, Commercial Tax Department ,Kerala
Shri. V.Murukesh Kumar, Joint commissioner (G), Commercial Tax Department ,Kerala
Mr. Thyagaraja Babu B.S, Assistant commissioner, IAC (CA), in-charge ITMC
Mr. VJ Gopakumar, Assistant commissioner 2 ,Commissionerate of Commercial Tax
Mr. V. Shyam Kumar, Assistant commissioner 1, Commissionerate of Commercial Tax
Mr. Murlidhara Prasad, Superindent A section, Commissionerate of Commercial Tax
Mr. Ajit.S, B 11 section , Commissionerate of Commercial Tax
Mr. Justin D, D 2 section, Commissionerate of Commercial Tax
Mrs. S.Valsala Devi ,Deputy commissioner, Thiruvananthapuram
Mr.B. Makheer lal, Inspecting assistant commissioner, Thiruvananthapuram
Mr.N. Murugan ,Inspecting assistant commissioner, Neyyattinkara
Mr.R.Shree kumar , Inspecting assistant commissioner, Amaravila
Mr.Ayubkhan.S.M , Assistant commissioner, spl. Circle, Vanchiyoor, Trivandrum
Mrs.Prathibha gnana Sundaram, Assistant commissioner, spl. Circle, Vanchiyoor, Trivandrum
Mrs. Sreekumari.L.S, Assitant commissioner, spl. Circle, Vanchiyoor, Trivandrum
Mr.A. Biji kumary amma, Deputy commissioner, Kollam
Mr.N.C. Chacko. Deputy commissioner, Ernakulam
Mr.P. K. Vijayalekshmi. Deputy commissioner, Thrissur
Mr.P.J. Jose Dalu, Deputy commissioner, Idukki
Mr.Mathew Thomas ,Deputy commissioner, Mattancherry
Mr.S.Sanal kumar Deputy commissioner, Kannur
Impact assessment of tax automation of CTD, Kerala I Page 8 of 105
Mrs. Pushpa K.A, Deputy commissioner, Kozhikode
We would like to extend our special thanks to Mr.Suman Billa IAS, Commissioner, Commercial Tax
Department, Kerala and Shri. A.V.Jose, Director, Gulati Institute of Finance and Taxation for their
continued support and guidance for this study
We would like to extend our thanks to Shri. V.Murukesh Kumar Sir, Joint commissioner (G), who ensured
a smooth take off for the project and relentlessly providing support in gathering the information‟s.
Our special thanks to Mr. Thyagaraja Babu B.S, Assistant commissioner, IAC (CA), in-charge ITMC and
each member of ITMC team for relentlessly providing support in gathering the information‟s.
Last but not the least; we take this opportunity to thank all the taxpayers, tax practitioners and employees
of Thiruvananthapuram circle, Kannur circle, Kozhikode circle, Mattancherry circle, Thrissur circle,
Ernakulam circle and Kollam circle respectively for enabling an informative interactive section to
understand the reach of KVATIS and its impact. Our special thanks to deputy commissioners and
assistant commissioners of each of the above circle for rendering their valuable time to facilitate the
survey which has enabled us to analyze the impact and reach of KVATIS. We also thank all sections of
the CTD department for providing us with the relevant data‟s and information‟s throughout our study
process.
The involvement and support of all these senior officials has enabled us to understand the expectations of
the project clearly. This will go a long way in defining the overall success of the project.
Team
Mr. Anand Hariharan, Manager, EY,India ,
Mrs. Swagata Basak, Senior Consultant, EY,India
Mrs. Dhanya Jose, Consultant, Ernst and Young Pvt Ltd
Faculty GIFT (Coordinator Dr.N.Ramlingam)
Impact assessment of tax automation of CTD, Kerala I Page 9 of 105
ABBREVIATIONS
Sl.N Acronym Expansion
1 AC Assistant Commissioner
2 Asst. Assistant
3 Ca chartered accountants
4 CAGR Compounded annual growth rate
5 CSDMS Centre for Science, Development and Media Studies
6 CST Central sales tax
7 CTD Commercial Tax Department
8 CTS Center for taxation studies
9 DC Deputy commissioner
10 Dy. Deputy
11 FY Financial Year
12 G2B government to business
13 GIFT Gulati institute of Finance and Taxation
14 IPT input tax credit
15 ITMC Information technology Management Cell
16 JC Joint Commissioner
17 KCTS Kerala Commercial Taxes System
18 KGST Kerala Goods and Sales tax
19 KVATIS Kerala Value Added Tax Information System
20 MIS Management information system
21 MMP Mission Mode Program
22 NeGP National e-Governance Plan
23 OPT output tax credit
24 SBI State Bank of India
25 SBT State Bank of Travancore
26 SLA Service level agreements
27 SSL Secured Socket Layer
28 STP sales tax practitioners
29 STQC Standardization, Testing & Quality Certification
30 VAT Value Added Tax
31 VCC VAT Consultative Committee
32 WAN Wide area network
Impact assessment of tax automation of CTD, Kerala I Page 10 of 105
1 Executive Summary
E-governance in Commercial Taxes Department, State of Kerala, India
Several government institutions have undertaken e-governance initiatives at multiple levels in the recent
past. With application of information technology to government processes, a strong and effective
information chain can be established that can help optimum resource utilization thereby leading to larger
economic benefits for the state as well as the community. Efficiency, transparency and accountability are
cornerstones of interaction with the government and crucial for improved service delivery that citizens and
institutions demand today.
In this report, we study the impact of an e-governance initiative by the Commercial tax department of the
state of Kerala in India called Kerala Value Added Tax Information System („KVATIS‟). The commercial
tax department administers various state taxes and accounts for more than 75% of the tax revenue
collected by the state catering to more than 1.7 lakh dealers in the state.
Our approach towards assessment
Our approach towards impact assessment of KVATIS comprised of quantitative and qualitative analysis
of inputs from internal and external service beneficiaries of the project which were the dealers, tax
practitioners and employees of the department. Sample size was chosen to be representative of the
population with 128 dealers, 156 tax practitioners and 200 employees. Further, dealers were stratified as
per different parameters such as mode of availing the services, area of operation, sector of operation,
commodity and region of operation. Structured questionnaires were pilot tested before administration of
the same to a larger audience. We have conducted random sampling and focus group discussions to
ensure more quality results from stakeholders.
1.1 Impact assessment of KVATIS- Commercial Tax Department
a. Increase in Revenue collection
The compounded annual growth of the
tax revenue collection is 17% over the
last 4 years.
The increase in tax collection is over
and above the economic downturn and
the increased base for each year.
0%
5%
10%
15%
20%
25%
2005-06 2006-07 2007-08 2008-09 2009-10
Pe
rce
nga
te g
row
th
Percentage growth in revenue collection
Impact assessment of tax automation of CTD, Kerala I Page 11 of 105
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
160.0%
2006-07 2007-08 2008-09 2009-10 2010-11 (Projected)
Increase in tax base
b. Increase in Tax base
The compounded annual growth rate
of tax base is 40% over the last 4
years.
The gap between the expected and
actual number of returns filed has
considerably reduced over the years.
The increased tax compliance is
owing to the availability of appropriate
MIS and other information‟s from
KVATIS system.
c. Interstate transaction
The compounded annual growth in
interstate transaction is 143% over the
last 4 years.
The availability of KVATIS system
enabled substantial data capture of all
interstate transactions
d. Trend in E-payment
There has been a drastic reduction in
offline payments over the last 2 years
and tremendous increase in online
payment.
The extent of e-payments is about
99%, the rest of offline payments can
be attributed to Compounding fees,
Payments against assessment, New
registration charges, Security deposits
etc
0
200000
400000
600000
800000
1000000
1200000
2006-07 2007-08 2008-09 2009-10
Inter state transactions
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
2008 2009 2010- April till September
Online Payment
Offline Payment
Impact assessment of tax automation of CTD, Kerala I Page 12 of 105
e. Fund utilization and trend in use of CSC in filing returns
The utilization rate for FY 2009-10 has
been very low, only 10.3% of the total fund
allotted for CSC‟s in providing services to
taxpayers has been utilized so far which
implies that the there has been a drastic
reduction in taxpayers availing the help of
third party agents for filing returns.
There has been a reduction of 27% in the
use of Akshaya Kendras in filing returns.
This can be attributed to the increase in
departmental assistance and user
friendliness of KVATIS system and hence
the increase in comfort ability of taxpayers in filing returns themselves.
f. Revenue collected per employee
There is more than 85% increase in the
revenue collected per employee both
including all cadres and for employees
who are directly involved in tax
compliance activities.
g. IT investments
The investments in hardware, software
and networking activities has been
considerably low (0.05%) with respect to
the amount of revenue collected by the
department
A large extent of investments is expected
in coming years for replenishing the old
systems in place, new set of servers for disaster recovery and additional computers for increasing
the extent of IT and computerization in the department.
0
10000
20000
30000
40000
50000
60000
70000
80000
Jan-March 2009
Apr-June 2009
July-Sep 2009
Oct-Dec 2009
Jan-March 2010
Nu
mb
er
of
retu
rns
file
d
Returns filed through AkshayaKendra
1.56
2.862.25
4.17
2005-06 2009-10
Revenue collected per employee
Including all cadre
Excluding all indirect contributors
0.09%0.08%
0.02%
0.06%
2006-07 2007-08 2008-09 2009-10
IT investment as a percentage of revenue collected
Impact assessment of tax automation of CTD, Kerala I Page 13 of 105
1.2 Impact assessment of KVATIS- Employees
There is 21.3% increase in number of files
scrutinized by the employees after the advent of
KVATIS
With comparable number of employees the
department was able to realize more revenue
by increasing the productivity of the existing
employees. There has been considerable
amount of trainings and investment made by
department to achieve the same.
Quality of work has improved with automation of
transactional tasks.
The valuable time of the employees can now be directed to more productive means like data
mining and other analysis like Input tax credit/ output tax credit etc which can be used to augment
the revenue collection and curb evasion.
More than 90% of employees expressed an increase in their morale and esteem attributed to
office automation and introduction of state of art technology.
The work load of employees on less–productive functionalities like maintaining voluminous
registers and tedious job of reconciliation etc have reduced tremendously giving ample time for
effective verification and scrutiny of the files thus enhancing the tax compliance.
Employees have reported considerable increase in workload mainly related to extent of scrutiny
and the increase in tax base.
The coverage of scrutiny has increased from 1 in 5 to 4 in 5, i.e. the effectiveness of scrutiny has
quadrupled over the four years from 20% to 80%.
All cases assigned to the official are to be scrutinized once in every 3 months, this is over and
above the increase in tax base of more than 40% over the last 5 years.
1.3 Impact assessment of KVATIS- Dealers and Practitioners
There has been a reduction of more than 50% in the number of visits made by the tax payer to
any of the nearby commercial tax office.
80 to 90% of the taxpayers and tax practitioners have agreed that the access to statutory forms
has made the process at ease as they no longer had to visit departmental offices to avail the
same.
There has been considerable reduction in the economic cost of transaction with the advent of
KVATIS
More than 80% of the tax practitioners and taxpayers have agreed that KVATIS has imparted
more discipline in the account management by monthly prompt and timely updation of accounts.
0
20
40
60
80
Before e-governance
After e-governance (KVATIS)
Number of files scrutinized/verified per month
Impact assessment of tax automation of CTD, Kerala I Page 14 of 105
This was enabled by increasing the control over their inventory stock and other normal business
aspects.
The magnitude of Z score at 99% confidence was used for analyzing the level of impact in each
of the dimensions. Supervision and promptness of updation of accounts was the most effective
aspect of KVATIS for dealers and practitioners. However as per dealers, there are not very
substantial change or impact in financial cost with the advent of KVATIS.
The clientele of practitioners experienced
an increase by more than 25%. This can
be attributed to the increasing tax base
and shift of tax payers from Akshaya
Kendras to tax practitioners. Shift of client
from Akshaya Kendras is owing to the
lack of technical competency and lack of
proficiency in the tax matter from CSC‟s.
All the parameters like high level of
computer literacy, any time assistance
form department via ITMC cell, VAT help
lines etc, the easiness of KVATIS system,
availability of proficient agents have made
an easy adoption of KVATIS for all tax
payers.
Dealers have rated direct awareness
programmes by the department through
word of mouth, training etc as the most
effective means. The direct interaction
has enabled the department to impart the
benefits of KVATIS system, the cost
effectiveness and ease of maintenance
and other governance factors. There was
frequent advertisement made in print
5%
66%
20%8%
1%
Percentage growth in number of clients
Zero or negative growth
Upto 25% growth
upto 50% growth
upto 75% growth
100% or More growth
Computer Literacy
21%
Availability of
proficient manpower
20%
Easiness of KVATIS System
21%
Departmental
assistance19%
Cost efficiency
19%
Factors - Adoption of KVATIS
Audio-visual Media 16%
Print Media17%
Online Services
18%
Handouts/ Pamphlets
14%
Helpdesk/Helpline
16%
Departmental
assistance19%
Awareness
Impact assessment of tax automation of CTD, Kerala I Page 15 of 105
media- both in regional newspapers and English newspapers to ensure the reach of awareness.
Practitioners have found online help/tutorials and Departments assistance as the factors which
have given them the remote support to move to KVATIS system.
The practitioners have rated human effort and financial cost and time spent to have increased
with KVATIS and this can be attributed to the increase in the clientele and the effort required in
filing a complete and accurate returns. Previously owing to the administrative and manual
processes, department could hardly check the compliance of all dealers within the limited time
Presently department has put restrictions on number of revisions in filing a return to ensure that
not much of bogus or window dressed details are fed into the system. Now if the returns are not
filed with adequate information and accurate details, the KVATIS system automatically generates
notices. . Hence it requires more effort for a practitioner to adhere to the rules and coherence of
information but the same is in-line with increasing the tax compliance.
Considerable amount of taxpayers have rated frequency of errors to have increased. Presently
system generated notices are generated for all kinds of formatting mistakes and other compliance
issues. Hence it requires additional effort from tax payers to ensure the adequacy and
consistency of data while entering the system.
The z-test has concluded that there has been a substantial impact in the service delivery standards and
levels with the advent of KVATIS. The Z-test was conducted at confidence levels of 90%, 95% and 99%
respectively. The positive result from higher confidence levels establishes that the impact is significant for
higher level of confidence.
The Department has been successful in taking the software application to the next level by making
appropriate measures to curb the challenges faced in the road of success. The support and planning of
the top level in strategizing the action plan‟s and phased manner of implementation played a major role in
ensuring the smooth transition of KVATIS application.
It was found that a next version of KVATIS can be released after considering the inputs from stakeholders
like chamber of commerce and other associations on the technical glitches to ensure the smoothness of
the process flow. It‟s also recommended that a digital signature/ digital certificate can be given to the third
party agents like Akshaya Kendras so as to enhance their role, control and discipline in the entire
working. The investments in IT need to be improved considerably in the coming years for recycling and
replenishing the old infrastructure. It was also recommended that a dedicated call center can be
established under commercial tax department with a person dedicated for handling 1 or 2 districts to
ensure the customer friendly assistances to the tax payers. Service level agreements can be established
to ensure the quality of services offered by departmental and call center assistances. It was also
recommended that digital signature be made available in the near future to reduce the dependency of
hardcopy submission made by the taxpayers presently.
Impact assessment of tax automation of CTD, Kerala I Page 16 of 105
The success of the story was by ensuring the commitment and acceptability from the part of the end
users in all the aspects of the project. There was proper hand-holding support provided by the department
to all stakeholders via online awareness programmes, tutorials, and departmental assistance to taxpayers
and via relevant training to the employees.
There are few areas of improvement as mentioned, however the overall rating of the KVATIS project has
been high. The analysis was mostly favoring the project owing to the aspects like drastic reduction in
number of visits to department, any time service, transparency and instant flow of information.
Impact assessment of tax automation of CTD, Kerala I Page 17 of 105
2 Introduction
Globally, Governments are the largest borrower and spender of public money. There has been increasing
pressure towards accountability and visible benefits from private sector, citizen and communities. Degree
of civic participation is accentuated by social, economic and technological factors e.g. rise in economic
growth and social factors such as literacy levels. E-governance is a means to increase these benefits and
enhance economic growth.
What is e-Governance?
According to the World Bank: (World Bank, 2008) E-Government refers to the use by government
agencies of information technologies - Wide Area Networks, the Internet, and mobile computing- that
have the ability to transform relations with citizens, businesses, and other arms of government. These
technologies can serve a variety of different ends: better delivery of government services to citizens,
improved interactions with business and industry, citizen empowerment through access to information, or
more efficient government management. The resulting benefits can be less corruption, increased
transparency, greater convenience, revenue growth, and/or cost reductions.
However, E-governance is more than automating forms, cataloguing of information and providing a
website for information dissemination and has its stages of evolution from basic computerization to online
interactive services to end customers. It can be a powerful catalyst to fundamentally simplify processes
and drive greater efficiency and effectiveness.
Broad interfaces that constitute e-governance are Government to Government, Government to Citizen,
Government to Business services. Public private partnerships have also been instrumental to deliver
some these services e.g. cover greater geographic area, deploy additional channel for citizen outreach
etc. Managed services providers can help governments focus on core competencies while outsource non-
core tasks to the private partner. Also, this marks a shift from disparate procurement of hardware,
software and services and managing the mix which can prove to be difficult over a period of time to a
more solutions and services based approach.
Impact of e-Governance in public service delivery
E-governance provides an opportunity to rethink processes, services and organization structure
to deliver them. This can potentially lead to significant reduction in paperwork, turnaround times
and streamline and standardize operations and undertake administrative reforms. Thus, there is
interplay of all the 3 factors of people, process and technology in a successful e-governance
implementation.
A proactive and service oriented government facilities more civic participation.
Greater transparency and accountability leading to a more cost-effective government
Impact assessment of tax automation of CTD, Kerala I Page 18 of 105
Better record keeping and documentation helps ease of access, information search and retrieval
Better knowledge management: Facilitate providing the right knowledge to the right people at the
right time. This enhances policy and investment decisions.
E-governance in India
E-Governance in India received an impetus with the introduction of the National e-Governance Plan in
2006. That India is being recognized as the leader in IT services implies that there are less supply side
constraints.
E-governance has been widespread especially in the revenue departments in India such as the Income
Tax department, state commercial tax departments, revenue departments of urban local bodies etc. E-
Governance initiatives has helped establish “voluntary compliance” as the cornerstone of revenue
administration by making it easy for taxpayers to comply and simultaneously helping the administration to
detect revenue leakage and take immediate action against non-compliance.
Commercial Taxes form the most important revenue base for the States and Union Territories in India,
often accounting for 60% - 70% of the total internal resources generated in India.
When value added tax was introduced in 2005 in India, maturity of VAT implementation varied across all
the states and a need was felt for streamlining various aspects of VAT administration.
The need for a Mission Mode Program (MMP) under Commercial Taxes was felt to establish a certain
degree of standardization across states with respect to Commercial Tax administration and to come up
with streamlined citizen-centric, service-oriented processes. It was in this context that the Commercial
Taxes MMP (CT-MMP) was conceived by the Government of India under the National e-Governance Plan
(NeGP).
It is against the above context, that we attempt to study the Kerala Value Added Tax Information System.
Impact assessment of tax automation of CTD, Kerala I Page 19 of 105
3 Approach and Methodology
The impact of KVATIS project was assessed by examining the difference in service levels before and
after the KVATIS project was augmented by the Commercial Tax Department.
It is assessed from the point of view of the various stakeholders of the KVATIS project namely the
Dealers/Traders, their designated agents such as Chartered Accountants/ Advocates/ tax practitioners
and the employees of the Commercial Tax Department. The cost, time, visits and files related dimensions
were measured directly while quality and governance related indicators were measured as perceptions on
a five point Likert scale, i.e. Interval based multiple choice scales.
There was an extensive measure made as part of the survey to collect structured feedback/
suggestions/areas of improvement, in addition to the impact of the computerized system. The additional
information was sought with a view to provide inputs for future evolution of KVATIS system The research
involved administering a structured survey to a systematically selected sample of different types of users,
and conducting focus group discussions to gain further insights into qualitative aspects of the project.
3.1 Sampling plan, Sampling size and Profile
The sampling number and profile was chosen to ensure that there was adequate representation of
various stakeholders across the Kerala state. The total sample population selected was 484.
The Survey was carried to access the responses from the three major stakeholder groups of this project
3.1.1 Dealers /Tax payers
The sample of nearly 128 dealers was derived by stratifying the entire user population on the basis of
each of the following parameters.
Figure 1. Taxpayers, Thiruvananthapuram
Impact assessment of tax automation of CTD, Kerala I Page 20 of 105
3.1.1.1 Mode of availing the services
The services provided by the department in terms
on e-filing, registration, e-payments etc can be
availed through various means. The taxpayer can
either avail the services directly from departments
through his own user-id and password or take the
help of agents like sales tax practitioners (STP‟s)
chartered accountants (CA‟s) or other Law Agents.
If the tax payer has difficulty in either of the above
means then he can go to the nearby citizen services
center called Akshaya Kendras in Kerala state and
avail the service free of cost.
Direct tax payers/ Self Payers
Who take the help of sales tax practitioners (STP‟s) chartered accountants (CA‟s) or other Law
Agents
Who avail the facility via Akshaya Kendras, The citizen service centers
3.1.1.2 Turnover of the business entity
Turnover is defines as the value of the total business
transactions.
Less than 10 Lakh INR
Between 10 lakh and 50 lakh INR
Above 50 Lakh INR
3.1.1.3 Area of Operation
Rural
Urban
6%
27%
67%
Turnover of the business entity
Turnover <10L INRTurnover INR >10<50LTurnover INR >50L
39
88
0
100
Rural Urban
Area of operation
60%
36%
4%
Mode of availing service
Direct tax payers/ Self Payers
Via tax practitioners (STP’s) /CA’sor other Law Agents
via citizen service centers
Impact assessment of tax automation of CTD, Kerala I Page 21 of 105
3.1.1.4 Sector of Operation
Manufacturer
Wholesaler
Retailer
Distributor/stockist
3.1.1.5 Commodity of Trade
Tax payers who trade in the below list of 10 commodities was shortlisted for the survey. The List of 10
commodities was arrived after aggregating various commodities and identifying the major business
commodities of the Kerala state. The white goods, electrical and electronic goods community were the
most diverse category and have ensured to include more samples to have appropriate representation.
Gold/Jewellery
White goods/ Electrical/ Electronic
Readymade garments
Rubber and rubber products
Iron and Steel/Hardware /Paint
Cement
Provisions
Motor Vehicles
Petrol/ liquor
Timber/Plywood/Glass/Hill Produce
3.1.1.6 Region
The main trade centers of Kerala namely Ernakulam, Kozhikode and Trivandrum were taken as primary
place of survey. To bring in the perspective of other districts a detailed field study was conducted at the
other districts and main centers namely: Mattancherry, Thrissur, Kozhikode and Kannur. The urban stint
in Trivandrum district was taken from Peroorkada, headquarters (Trivandrum) and Vanchiyoor.
Two rural circles of Trivandrum district was covered in the survey namely Nedumangadu, Neyyattinkara.
3.1.2 Tax practitioners
The sample of nearly 156 tax practitioners was derived by stratifying the entire user population on the
basis of region mainly the trade centers of Kerala namely Ernakulam, Kozhikode and Trivandrum. The
urban stint in Trivandrum district was taken from Peroorkada, headquarters (Trivandrum) and Vanchiyoor.
To bring in the perspective of other districts a detailed field study was conducted at the following districts,:
19%
31%37%
13%
Sector of operationManufacturer
Wholesaler
Retailer
Distributor/stockist
05
101520253035
Nu
mb
er
of
Pe
op
le
Commodity
Impact assessment of tax automation of CTD, Kerala I Page 22 of 105
Mattancherry, Thrissur, Kozhikode and
Kannur. Two rural circles of Trivandrum
district was covered in the survey namely
Nedumangadu, and Neyyattinkara.
3.1.3 Employees of the Commercial
Tax Department
The sample of nearly 200 employees was
derived by stratifying the entire employee
population on the basis of Areas of
Working namely Assessment wing,
Intelligence wing and Check post. The
other criteria of selecting employees was
based on regions i.e. employees from
main trade centers of Kerala namely
Ernakulam, Kozhikode and Trivandrum. The urban stint in Trivandrum district was taken from
Peroorkada, headquarters (Trivandrum) and Vanchiyoor. The other districts where a detailed field study
was conducted are Mattancherry, Thrissur, Kozhikode and Kannur. Two rural circles of Trivandrum district
was covered also in the survey namely Nedumangadu and Neyyattinkara
Figure 2. Tax practitioners
Impact assessment of tax automation of CTD, Kerala I Page 23 of 105
Districts/Regions Dealers Practitioners Employees
Mattancherry 12 14 30
Thrissur 23 21 27
Ernakulam 15 20 16
Kannur 18 24 22
Kozhikode 9 16 25
Kollam 16 22 21
Trivandrum ( Perrokada, Headquaters, Vanchiyoor) 23 17 43
Neyyatinkara/Nedumangadu 12 22 16
Total 128 156 200
3.2 Pilot testing and Validation of research instruments
Prior to the survey, the research instruments were validated. The first level of validation was done by few
eminent employees in the department from Assessment wing and intelligence wing respectively and
second round of validation was jointly done by experts from an autonomous institute under government of
Kerala and Higher officials of Commercial Tax Department.
The research instruments were tested with a pilot run of approximately 20 Dealers (Tax payers),
Practitioners and Employees each. The pre-test was conducted to verify the appropriateness and clarity
of the questions. The modifications were made in the questionnaire format based on the suggestions from
pilot run.
Impact assessment of tax automation of CTD, Kerala I Page 24 of 105
4 Kerala Value Added Tax Information System
4.1 About the Department
The Department of Commercial Taxes is the major source of revenue of the Government of Kerala,
accounting for 3/4th of its revenues. Commercial Taxes Department mobilizes major share of revenue to
the State of Kerala by focusing tax Laws compliance in the business community. The Department caters
to more than 1.7 Lakh of dealers (Tax Payers) registered under different central and state Acts of
taxation.
The organization of the Commercial Taxes Department comprises of five important wings and the
Commissioner is the administrative head of the Department.
Commercial Tax
Department
Tax
Assessment
Wing
Intelligence
Wing
Investigation
Wing
Internal Audit
Wing
Appellate
Wing
LAW
Wing
The Commercial Taxes Department consists of the erstwhile Agricultural Income Tax and Sales Tax
Department. The main activities entitled to Commercial Tax departments are registration of dealers,
collection of tax, recovery of arrears of tax, prevention and detection of tax offences under a series of
legislations enacted by the State and the Central Governments.
The Commercial Taxes Department administers the Central Sales Tax Act 1956, Kerala Surcharge on
Taxes Act 1957, Kerala Money Lenders Act 1958, Kerala General Sales Tax Act 1963, Kerala Tax on
Luxuries Act 1976, Kerala Agriculture Income Tax Act 1991, Kerala Tax on Entry of goods into Local
Areas Act 1994 and The Kerala Value Added Tax Act 2003.
The geographical coverage includes the State Head quarters at Trivandrum and other 15 District Head
quarters. There are around 431 Commercial Tax Offices, which includes 221 assessment circles, 74
Check posts, 75 Enforcement Squads, 16 Investigation Wings, 1 Appellate Tribunal. These are
geographically distributed across 14 revenue districts. There are a total of 4615 Employees catering 1.70
lakh dealers.
Impact assessment of tax automation of CTD, Kerala I Page 25 of 105
4.2 Need for implementation of KVATIS
The services provided by Commercial Taxes Department were all manual and paper based. The below
diagram depicts the kind of interactions /transaction which used to be present previously.
Commercial Tax Department
Return Filling
Ba
nks
CT
D O
ffic
ers
Cle
rks
De
ale
rsT
rea
su
ry
Filled return form
Return form
Purchase statement
Sales statement
Calculates the Tax
Remits the amount
to Government
Account
Goes to office to
get the payment
Challan (4 copies)
Challan
Inward Register
Submits the Filled
forms and
payment challan to
department
Enters the required
information to the
corresponding registers/
System
Verifies the returns
filed and initializes
the same
Return form is
given back to
citizen for
appropriate
corrections
A
A
The returns are
accepted, Credit is
given to the tax
payer
No
Yes
A serial number is
given for each
challan
Daily collection register
Cheque Register
Assessment register
Goes to treasury
to get the
payment
Challan sealed
Citizens goes to
Bank to remit the
amount
Inward
Register
No
Verifies the returns
filed and initializes
the same
The dealers had to do the following tasks before the KVATIS system was operationalised-
Preparing separate return forms for different acts such as VAT, CST and KGST.
Tabulating input tax credit (IPT) /output tax credit (OPT)/ Reverse tax /Special Rebate & Net tax
Payable.
Frequent visits to CTD office
To receive Challan/official receipt of payment.
To get signature of CTD officer
To submit return
To collect statutory forms
To receive acknowledgment
Impact assessment of tax automation of CTD, Kerala I Page 26 of 105
Visit to Treasury /Bank:
To treasury for affixing office seal on challan
To bank for remittance and receiving challan
With respect to Officials of the Commercial Tax Department, the following were the office tasks before the
operationalisation of KVATIS System
Maintain the uniformity in commodity name in the return and verifying the correctness of
commodity classification and hence eliminating misclassification of tax rates
Officials had to ensure that previous returns have been filled appropriately
Maintain large number of voluminous registers and accounts like daily collection register,
assessment register, dealer Ledgers etc
Manual posting of return and collection details in the assessment register
Manual cross verification of Sales / Purchases invoices
Dealer-wise sorting of Check Post declarations
Filing the Declarations in the assessment records
Cross matching the Declarations manually
Preparing commodity group-wise collection report
Monthly reconciliation with treasury
The registered dealers had to file periodic returns at the Assessment office of the Commercial Tax
Department in a prescribed format along with the detailed enclosures of purchases and sales invoices
effected during the period of consideration. Each had to file separate returns under the following Acts like
CST, VAT and KGST. Based on the tax rates and other details, the dealers have to work out the net
taxable amount. At-least 6-7 visits to CTD offices was inevitable for tasks like submission, to receive
challan, statutory forms, for signatures etc. the dealers had to visit Treasury to get the serial number for
their challan and then had to visit the banks to remit the tax to Government account.
Impact assessment of tax automation of CTD, Kerala I Page 27 of 105
The payment procedures
Commercial Tax Department
Payment Process and Procedures
CT
D O
ffic
ers
/
Cle
rks
Ba
nk
Tre
asu
ry
Monthly
reconciliation of
Daily collection
register and
Treasury
Registers
Sends the copy of
challans to the
Department
Does the
Mapping of
Challans to
respective Files
of the dealer
Collects the
challans from
treasury, Enter
the books of
account and
registers, Dialy collection
register
Cheque Register
Assessment
register
Payment is
remitted to
Government
Account
Enters a serial
number to each
of the challans
Monthly
reconciliation of
Daily collection
register and
Treasury
Registers
Monthly
reconciliation of
Daily collection
register and
Treasury
Registers
4.2.1 Dealers perspective
A dealer had to make at-least 6-7 visits to office in the process of tax remittance.
1. They had to obtain the prescribed challan forms from the assessing officer countersigned.
2. Visit the treasury officer for affixing remittance sequence number on the challan
3. Remit the taxes at the nearest tax collection bank
4. Submit the triplicate copy back to the assessing officer for accounting in the case of direct remittance.
The other means of payment was through demand draft or cheque. While availing these payment options,
the credit was allowed only on receipt of the original challan from the treasury. The delay was around a
week‟s time.
4.2.2 Department’s perspective
The Officers had to deal with large number of people who have to collect forms, to get signature etc. The
clerks had to visits treasury to obtain the details of transactions and enter the results in voluminous
registers like daily collection register, assessment register etc. The respective files and challans had to be
posted on to the dealers files. On a monthly basis the huge task of reconciliation was carried by two
Impact assessment of tax automation of CTD, Kerala I Page 28 of 105
officers of the department and cross checking the entries made by treasury. The major problem faced
owing to the procedural dependencies was missing credit/ challans.
4.2.2.1 Check post Operations
The transporters submit declaration of goods transported in a prescribed format along with copy of the
consignment documents. The Interstate consignments undergo inspection at the commercial Taxes
border check posts.
Dealers having inter-state trade have to furnish returns separately under CST Act. The transporters
submit declaration of goods transported in a prescribed format along with copy of the consignment
documents. The documents are sorted and transferred to the assessing officer periodically for
accounting. Advance Tax is collected at check posts for certain listed evasion prone consignments. The
number of interstate consignment vehicles comes to 1,800,000 per annum with an average of 4
enclosures per transaction. The Interstate Consignment transactions could be verified when transaction
documents from check posts are available
4.2.2.2 Input Tax Credit
The dealers are eligible for Input Tax credit on the purchases effected from registered dealers within the
state. The respective net tax payable was calculated by deducting the input tax credit for the respective
month from the output tax collected. There used to be a delay in Commercial Tax department officers to
accept and allow the input credit to the dealers. It was difficult for officers to verify the genuineness of
input tax claimed by the dealer. This was owing to the lack of proper information system whereby timely
availability of relevant information was difficult. Usually the officers were constrained to accept the returns
without an effective scrutiny or cross verification of purchases with the corresponding sales.
4.2.2.3 Misclassification of Commodities
As per VAT rules, the commodities are classified under various tax rates namely 12.5%, 4%, etc. To
evade payment of tax, the dealers were found to willfully classify 12.5% taxable commodities under 4%
commodities. To ensure the effectiveness of scrutiny the department had to deploy 800- 1000 officers for
the assessment.
4.2.2.4 Paper based processing
Owing to manual paper based processing, timely data sharing among different offices was very difficult.
The report generation and MIS was difficult to gather and required huge man efforts. Proper data mining
and business intelligence was not possible to enhance the effectiveness of tax collection.
4.2.2.5 Discretionary powers
The dependencies on Commercial tax officers had loopholes where in the officers can use their
discretionary power for falsifying the facts. This opaque system of approach gave way to corruption and
other malpractices within the system.
Impact assessment of tax automation of CTD, Kerala I Page 29 of 105
4.3 KVATIS
KVATIS (Kerala Value Added Tax Information System) is the software system developed and deployed
by the department to facilitate tax administration of VAT in Kerala state. KVATIS is accessible at
www.keralataxes.gov.in. The software provides an Internet web based application for public interface
which is accessible to all registered dealers & transporters. The Intranet application is accessible only to
the employees of the Department and is accessed through Wide area Network (WAN). KVATIS intranet
application was developed and deployed during 2007. The project became operational on November
2007.
KVATIS was part of the a Commercial Taxes Mission Mode program which aimed at the creation of a
National Infrastructure for facilitating inter-state trade, ensuring uniformity and standards in the
Commercial tax administration and enabling free exchange of information. It was a project initiated as
State Mission Mode Project (MMP) in tune with the National e-Governance Plan (NeGP).
4.3.1 Software Modules
The dealer registration module which deals with registration of a dealer, issue of certificates &
permits, its renewal, cancellation, suspension, amendment etc.
The returns module deals with filing of return, details of payment, defaulters, enclosures,
verification, etc.
The check post module deals with details of vehicles, consignor – consignee, goods, verification,
seizure, auction, transit pass and transport permits etc.
The tax accounting module deals with the payment transactions, treasury, cheques, cash, scroll
capture, verification, and reconciliation & ledger.
The enforcement module deals with complaints, investigation, vehicle checking, detention of
goods, inspection of shops, security, auction etc.
Other major modules deals with functions related to penalty and offences, audit assessment,
appeals and revisions, recovery, refunds and employee information.
The below diagram depicts the flow chart for filing of return with the advent of KVATIS System.
Impact assessment of tax automation of CTD, Kerala I Page 30 of 105
Tre
asu
ryD
ea
lers
KA
VT
ISC
TD
Offic
ers
Ba
nk
Login to KVATIs
System ( End of
Month)
System Calculates
Tax amounts and
automatically route
to the bank site for
payment
Fills in the relevant data
in the prescribed online
format
Purchase invoice
Sales invoice
Uploaded into the system
Account wise/
Head wise E-
payment is done
Submits the
Application online
System does the
reconciliation of
accounts based on
bank scroll and
Treasury serial
numbers
Statement on a daily
basis
Bank Scroll is send to
Treasury /CTD
Treasury inserts
serials number of
the transactions
and send back to
Department
Citizen receives the
system generated
challan with serial
number from
Treasury
( after 2 days)
Real time transfer
of money
Bank Scroll is
received on a daily
basis
Bank Scroll is
received on a daily
basis and uploaded
in KVATIS
KVATIS
automatically
generates the
Challan Acknowledgement
Updates challan with
serial number from
Treasury
Verifies the entries and
credit is given to the tax
payer
4.4 Objectives and Goals of KVATIS
The vision of KVATIS Project is “to ensure effective tax administration by co-ordinating the stakeholders,
thereby contributing significantly to the State‟s development”. The main objectives for which KVATIS
system has been started are
To increase/accelerate the tax collection and to augment the tax compliance and hence improve
the tax administration at the department under the constraints of human resource.
To reduce the hardship of the taxpayers
by reducing the interface between the officials and the trading community
By eliminating the physical presence and restricted timings to service access.by creating a user-
friendly atmosphere/environment conducive for tax compliance. By simplifying the processes and
by ensuring dealer participation in tax governance. By reducing corruption and by ensuring
effective coordination.
The system also augments that timely delivery of service is given to stakeholders. Indirectly the system
aims to brings in a more sense of accountability to each of the stakeholders and transparency of process
Finally it‟s also envisaged to assist the department offices in detecting tax evasions made by the dealers
using various modes of operandi and hence ensuring greater tax compliance.
Impact assessment of tax automation of CTD, Kerala I Page 31 of 105
4.5 Achievements / Outcomes of the project
The benefits of the project can be looked at from the two main dimension of service provider i.e. the
commercial tax department and the service beneficiary i.e. the dealer.
4.5.1 Dealer’s perspective
The benefits from the dealer‟s perspective can be summarized under the following heads:
4.5.1.1 Ease of access through simple & transparent process
KVATIS meant there was relief from the long queues at offices, for the submission of returns/ tax
remittance. Instant credit of the Tax amount due, from dealer‟s account or dealer authorized account, to
the Government account and thus faster realization of funds
4.5.1.2 Reduced cost of compliance
The need to visit to tax office, wait in long queues and restricted timings for submission of returns is totally
avoided by electronic filing system. Extended e-filing services through citizen service centers in his/her
locality free of cost reduced the cost of compliance. Also, tax payers are relieved of service charges
availed by the Banks for Demand Drafts, cheque clearance, etc.
4.5.1.3 Reduced paperwork
Dealers need to file single integrated, simplified return under different Acts of the state government,
reducing the preparation effort. Errors resulting from manual tabulation of Input Tax credit, Output Tax
Reverse tax, Special Rebate and Net tax payable are averted by electronic filing. Completeness is
ensured prescribing standards and educating traders. Dealers are provided facility to prepare sales &
purchase invoice details offline and upload the same electronically. Return accounting registers are
generated electronically by the system.
Also, KVATIS meant that process of collection and manual reconciliation of instruments could be avoided.
4.5.1.4 Avoids office visits
e - Payment facility helped the dealers to remit the taxes instantly without having any effort for document
preparation or multiple department visits for remitting tax. Tax due is automatically computed and
electronically transferred to Government account integrating Banks and Treasuries. The dealer is able to
verify his tax dues and payment credits instantly on submission of returns. Reconciliation previously done
decentralized with extensive manpower in collecting challan documents from banks and treasuries and
cross verification with the Accountant General, which took several months to complete is now centralized,
automated with little human intervention and completed in the same month. No missing credit to dealers
since the project is implemented. Dealers could use either their existing bank account or an authorized
account or from a new zero balance account opened for e-payment. Tax accounting is automated and
maintained by the system. The Department is able to instantly ascertain tax revenues. 100% of the
dealers avail e-payment along with e-filing.
Impact assessment of tax automation of CTD, Kerala I Page 32 of 105
4.5.1.5 Instant acknowledgement
Instant acknowledgement is provided on return filing which can be subsequently tracked by the dealer
leading to greater transparency. Dealers can also verify the status of the e-payment anytime.
4.5.1.6 Instant e-Challan
The system generated e-challans can be taken by dealers on a real time basis. The e-challan will be later
updated with treasury serial number and the dealer can downloads the same from KVATIS system after 2
days.
4.5.1.7 Faster clearance at check post
Dealers could electronically declare interstate consignments and avail faster clearance at check posts,
make e-payment of advance tax. Delay in check post clearance reduced to 20 minutes from an average
of 3 hours especially for export consignments and fast moving consumer goods. The check post
consignment transaction is immediately accounted in the dealers portfolio maintained at the assessing
office. Annual registration renewal is facilitated on-line without office visit.
4.5.1.8 System generated annual return
System generates the tax due as per return. After successful payment of the tax, system would
automatically submit the return avoiding disparate processes for return and tax filing.
4.5.1.9 Reduced corruption
With reduced discretionary powers to government officials which could potentially be misused, avenues
for corruption have been significantly reduced.
4.5.1.10 Faster availability of statutory forms
Dealers avail electronic download facility for statutory forms to avail tax concessions for interstate
consignments without the need to visit CTD office.
4.5.2 CTD’s perspective
4.5.2.1 Benefits from paperless office
With the introduction of KVATIS, office space occupied by the paper documents has reduced by 40%.
Impact assessment of tax automation of CTD, Kerala I Page 33 of 105
Figure 3. Storage - Paper based system
Figure 4. Office automation- Less storage space
4.5.2.2 Increased tax base and compliance rate
Registration has grown from 1 lakh to 1.72 lakh with introduction of KVATIS. e-Filing enabled the
department to effectively and easily conduct return electronic scrutiny. E-uploading of invoices meant that
system is able to build unaccounted invoices. Scrutiny rate enhanced from 20% to 80% within a span of 1
year. Compliance level has improved from 50% to 90% The Department could achieve a regular annual
growth of 20 – 25% in tax collection even in the period of recession by ensuring transparency,
accountability and responsiveness. Proper record keeping has helped compliance e.g. interstate statutory
forms issued by the state helps check fraudulent interstate transactions
Impact assessment of tax automation of CTD, Kerala I Page 34 of 105
4.5.2.3 Instant credit of Tax
Instant credit of Tax meant that cash is realized faster by the government
4.5.2.4 Relief from the manual process
Automation of basic manual processes helped increased the efficiency and productivity of employees.
Employees could process 63 number of transaction compared to 49 earlier.
4.5.2.5 Databank of dealer to dealer transactions
Relevant details of the dealers are maintained and can be easily searched and retrieved by the
commercial tax department
4.5.2.6 Refund verification made easy
Dealer ledgers and visibility of input and output tax of dealers means refund claims can be verified easily
4.5.2.7 Avoids treasury reconciliation
e-Challan provides the Bank Reference & Treasury Sequence numbers. Also, real time Cyber Treasury
Receipt is provided from the bank online. This meant that lengthy process of treasury reconciliation is
streamlined with help of KVATIS.
4.5.3 Awards and recognitions
State e-Governance Award for Best Utilization of Akshaya – 2009 for maximum utilization of
Citizen service providers, Institute of Management in Government
State e-Governance Award for e-Payment Services – 2010, for best e-governance award for
enabling e-payment services, Institute of Management in Government
e-India 2010 Awards for e-Tax Administration – 2010, Government to Business – Initiative of the
Year – Jury‟s Choice” for the “E Tax Administration Programme”, E India awards are organized
by the Centre for Science, Development and Media Studies (CSDMS) and the Department of
Information Technology, Government of India to recognize excellence in IT initiatives.
CSI Nihilent Awards for e-Tax Administration – 2010, in the category of Progressive e-Governed
State
These awards are a testimony to the world class and cutting edge initiative. These awards also depict
the progression CTD, Kerala has made with respect to other states.
Impact assessment of tax automation of CTD, Kerala I Page 35 of 105
4.6 Geographic and functional coverage of KVATIS
KVATIS Application is accessible across all the 431 department offices spanned across the 14 districts of
the Kerala State.
KVATIS was designed for operation with a central data centre along with web-browser client architecture
accessible over internet. The system is made easier to implement, access, and use.
The department has implemented the following e-Services under the e-Governance program:
S.N Services/Milestones Milestones timeframe
1 e-Filing of return January 2009
2 e-Uploading of invoices January 2009
3 e-Payment of tax September 2009
4 e-Payment of Advance Tax January 2010
5 e-Downloading of statutory forms January 2010
6 e-Consignment declaration January 2010
7 e-Renewal of registration April .2010
8 e-Uploading of Stock Inventory April 2010
4.7 History of Evolution
Computerization of the Commercial Taxes Department was initiated in the year 1998, when the
government decided to implement a comprehensive Kerala Commercial Taxes System (KCTS) under the
regime of the General Sales Tax Act. During the period from 1998 till the year 2005, KCTS went through
various phases of implementations. Subsequent to the introduction of the Value Added Tax legislation,
the KCTS initiatives were finalised.
A fast-track implementation of the Kerala Value Added Tax Information System (KVATIS) was undertaken
by the Commercial Taxes Department in the year 2005, incorporating business processes under the new
legislation.
Impact assessment of tax automation of CTD, Kerala I Page 36 of 105
4.7.1 Phases of Implementation- Milestones
The implementation of KVATIS project was planned in a phased manner.
4.7.1.1 Initial Phase
The initial phases of the project were to provide a backend facility to switch over the functionalities of
registration and check post transactions as and when the KVATIS software was ready. It was aimed to
digitize the dealer‟s trade particulars by the in-house team when software provider M/s CMC Ltd. will be
closing the software modules. The connectivity between officers was established by M/s Frontier Ltd. The
parallel track of software development, the connectivity establishment and digitization enabled a fast
switch over to KVATIS system. It was later planned to digitize the periodic returns and enforcement
operations. The strategy adopted was to begin the process by digitization of backlog returns off-line in a
decentralized manner from all assessment offices. Parallely the return for the current period was also
digitized. It was later converged to the single database.
4.7.1.2 Second phase
The second phase of the project is to enable electronic return filing facility with automated tax calculation
to the dealers. This was achieved through a staged approach.
Dealer registration and digitization of the dealers particulars
Checkpost Transactions
Digitization of backlog returns off-line
Electronic e-filing and e-uploading of invoices
Stage 1. Taxpayer above 50 Lakh turnover
Stage 2. Above 25 lakhsturnover
Stage 3. Mandatory to all registered dealers
e-Payment and electronic scrutiny
E-downloading of Statutory forms
E-payment of advance tax
e-Declaration facility for interstate consignments
e-Renewal of registration
e-Closing stock upload facility
e-Audit reports
Till 2008-09
2008-Jan 2009
September 2009
January 2010
April 2010
Impact assessment of tax automation of CTD, Kerala I Page 37 of 105
1. All major tax payers having an annual turnover of 50 Lakh and above were mandated to move
to e-filing facility. The dealers were able to prepare the return and enclose the required invoices
along with the return and upload the same.
2. In the next stage all dealers with annual turnover of 25 Lakh and above was included in the
mandatory e-filing group.
3. Finally all the remaining dealers who are registered and having a turnover of more than 5 lakhs
was mandated for e-filing.
4.7.1.3 Mode of availing services
Dealers can e-file periodical returns from any place at any time through the internet. Those dealers
having the facility of Internet can file their returns by accessing the official website
www.keralataxes.gov.in. Whereas, those dealers not having the facility of Internet can file their returns
either through Akshaya e-Centers or through any authorized centers, free of cost. Presently, 1178
Akshaya Centers are authorized for providing e-filing service to VAT dealers. The Government is paying
Rs.25/- per return to these Akshaya Centers, towards the expense of e-Filing. Trade Organizations & Tax
practitioners are also considered as Authorized Centers for e-Filing.
While e-filing the return, dealer has to upload dealer to dealer Purchase and Sales Invoice details into the
system. The data so received, enable the department to generate various analytical reports and to
perform Scrutiny. Computerization and e-filing of return augment revenue collection by curbing tax
evasion and increasing tax compliance.
4.7.1.4 Third phase
The third phase was to introduce e-payment facility and e- declaration facility. The e-payment was to
enable tax payment by the integration with banks, treasuries and the department. All dealers were
mandated to avail e-payment facility. E-payment was facilitated by integrating the commercial taxes web
application with the Bank‟s website (State Bank of India and State Bank of Travancore). The Government
has accorded sanction to 11 other banks also, for providing e-payment facility for remittance of
Commercial Taxes, and Reserve Bank of India has approved 7 banks. The extension of facilities to new
banks is pending with Department head office and will be commissioned in the near future. In order to
facilitate e-Payment, more than 7500 commodities were grouped into 314 commodity groups. Necessary
amendments in the Kerala Treasury Code, VAT Rules, CST Kerala Rules and KGST Rules were
incorporated to facilitate e-payment. The e-Declaration facility was introduced for interstate consignment
transactions.
Since the tax payers had to file returns differently under different acts, the VAT, CST and KGST returns
were integrated to facilitate better service to all categories of dealers.
Impact assessment of tax automation of CTD, Kerala I Page 38 of 105
When the consignment enters the State Border, there had been instances of evasion in tax payment in
certain commodities at the border check post. To curb this evasion the e-payment mechanism was
extended to a new facility of Advance tax payment.
The system was further improved by providing facilities to conduct electronic scrutiny of returns by cross
verification of transactions among dealers. While e-filing the return, dealer has to upload dealer to dealer
Purchase and Sales Invoice details into the system. The VAT-Log, a trail of transactions, enabled the
department to scrutinize the genuineness of input tax claimed by the tax payers.
4.7.1.5 Fourth Phase
The fourth phase was to provide online- download facility of statutory forms given below through KVATIS
for availing tax concessions and thereby prevent bogus concession claims.
C form, for interstate sale of goods,
E-I and E-II for sale during movement of goods by transfer of documents,
F forms for branch transfer of goods,
H forms for sale during course of export
The system of issuing blank statutory forms in advance and in person was discontinued. The dealer no
longer has to visit the circle offices for obtaining the supply of the forms. This initiative has been
mandated to all tax dealers and the system has been designed in such a way as to download the form
instantly provided the transaction invoices are uploaded along with periodic returns. An option to capture
statutory forms utilization data is also provided.
4.7.1.6 Current Phase
In the current phase facilities like e-renewal of registration, e-closing stock upload facility and e-audit
reports upload facility has been introduced. The objective is to ease assessment, compare the profitability
and gross margins adopted by the dealer etc. This module is still in progress.
Sl.N Particulars Current participation rate
1 Digitization of tax payers information 100%
2 Check post transaction through intranet 30%
3 Digitization of backlog returns 50% with regard to returns
10% with regard to enforcement
operations
4 e-filing of returns 100%
Impact assessment of tax automation of CTD, Kerala I Page 39 of 105
5 e-payment 100%
6 e-declarations 5%
7 Advanced Tax payment 100%
8 Online- download facility of statutory forms 100%
9 e-renewal of registration, 100%
10 e-closing stock 100%
11. e-audit (Upload audit report) Operationalised
The e-declaration facility was introduced very recently and requires more awareness and familiarization
for all stakeholders about the advantages and potential offered by the module. The department has plans
pipelined to provide adequate training and awareness programs in this regard to improve the participation
rate of newly introduced modules of KVATIS.
4.8 The visionary’s of KVATIS- the Top Management
KVATIS was the novel attempt to incorporate e-Governance for G2B services in the Kerala State. The
key dignitaries who made this project reality are: Mr. V.Somasundaran IAS, Commissioner of Commercial
Taxes initiated the project, Mr. Paul Antony IAS conceptualization, design, and implementation strategy.
He strategized the process re-engineering and re-structuring of the department to embrace e-
Governance. The strong leadership and ownership exhibited has laid the foundation to Kick- off the e-
Services. The initiative was very further enhanced and well lead by the next successor Mr. P.Mara
Pandian IAS. During his tenor the e-Services like e-Returns, e-Payment, e-Declaration, e-Forms and e-
Registration were started. Mr. Suman Billa IAS, the present commissioner is currently championing the
project and has contributed e-Stock and e-Audit to the list of services. Steps are initiated for additional tax
revenue mobilization by exploring the information‟s available within the system through data mining.
Impact assessment of tax automation of CTD, Kerala I Page 40 of 105
4.9 Stakeholders
4.9.1 Technical Committee
The Government of Kerala constituted Technical Committee consisting of IT experts from Industry,
Government, public sector and domain experts from the Department. The advice of the Technical
Committee was taken in key decisions regarding the project.
4.9.2 IT Management Cell
The Department constituted IT Management Cell consisting of technical members from within the
Department to monitor the progress of implementation of the project, its administration and Change
Management. IT Management Cell performs the key aspect of co-ordination of the various entities
involved in accordance with SLAs and ensuring the stakeholder participation. The IT Management Cell
functions in close association with the Department leadership. System Administrators are deployed in 14
districts to administer district level project implementation in close association with administrative heads.
4.9.3 Gulati Institute of finance and taxation (GIFT)
Previously known as center for taxation studies (CTS), GIFT is an autonomous institution constituted by
the Government of Kerala in 1992 .The institute being an independent unit working closely with
commercial tax department had provided inputs in matters related to statute formulation of KVATIS,
training, and policy inputs through studies and projects. GIFT has also been a facilitator of training by
providing infrastructure and other logistics for training facilities.
Stakeholders
Govt of Kerala
Commercial Tax
Department
Dealers
State Tax practitioners/CA
S/Law
software/Hardware/Network
Vendors
CTS/GIFT
KSITM
Vat Consultative Committee
Akshaya Kendras(CSC)
Impact assessment of tax automation of CTD, Kerala I Page 41 of 105
Role of GIFT
Conduct training programmes on Kerala Value Added Tax Statutory Forms , Newly recruited
commercial tax officers , KVATIS acts and rules, system administrators etc over the years.
Works as a catalyst to enable KVATIS software of commercial tax department to effectively reach
the intended target stakeholders.
Conduct seminars on Commodity Classification and release of Commodity Finder Book and Work
shop on Model Format on Chartered Accountants Audit Statements for the State Value Added
Tax
Has published books on Value Added Tax (VAT)
4.9.4 Software /Hardware and Network Vendors
4.9.4.1 M/s CMC Ltd
CMC is the software vendor and developer of KVATIS Project. The company has worked hand in hand
with the Department by deploying their development teams at the head quarters ensuring the availability
of support any time during the development phase. The maintenance of the software is also undertaken
by the company.
4.9.4.2 M/s HCL Ltd
The supply and maintenance of client workstation PCs is handled by M/s HCL
4.9.4.3 M/s Frontier Systems
Responsible for implementation and maintenance of the Wide Area Network connecting 431
geographically distributed offices through the Kerala State Wide Area Network Infrastructure.
4.9.5 Kerala State IT Mission
The Hardware for servers and necessary Operating system were co-located at State Data Centre
Infrastructure Setup by Kerala State IT Mission and owned by the Kerala Government.
4.9.6 VAT Consultative Committee (VCC)
VCC consists of members of Chamber of Commerce, traders associations who represent the major
stakeholders actively participated in the project. Each stage of implementation is consulted with the VCC
suggestions are considered while implementing. The significant changes are implemented only after due
consultation.
4.9.7 Akshaya Kendras
The citizen service centre, an entrepreneurship project in association with IT Mission, coordinated with
the Department in delivering electronic services through 1187 Akshaya centers.
Impact assessment of tax automation of CTD, Kerala I Page 42 of 105
4.9.8 Dealers
Any person who carries the business of buying, selling, supplying or distributing goods, directly or
indirectly, for cash or for deferred payment, or for commission, remuneration or other valuable
consideration and who are registered with Commercial Tax Department.
4.9.9 Sales Tax Practitioners /CA’s /Law Agents
The sales tax practitioners are agents/ representatives of the Dealers (Tax payers) and help them in
maintaining the sales and purchases accounts of the entity. They are legally registered agents.
5 Implementation framework
5.1 Capacity building initiatives
5.1.1 Training Initiatives
To enable a smooth flow, extensive training programs were conducted for each of the stakeholders of the
KVATIS project. The stakeholders trained are dealers, Sales Tax Practitioners and officials of the
department from assessment wing and intelligence wing, also district coordinators.
There have been continuous training programs conducted by the department with the help of system
administrators and system supervisors identified. The Software development team M/S CMC Limited
also helped department in imparting the training.
The in house training was provided at department‟s 4 computer labs located at Ernakulam,
Thiruvananthapuram, Palakkad and Kozhikode respectively. Various trainings were provided to State Tax
Practitioners (STP‟s) through organization like Indian Chamber of Commerce etc.
5.1.2 Investments on Training
Training details Amount of investment (Rs. In Lakh)
Initial phase 5,200
Follow on Trainings 20
Follow on training was given to CTD officers and Assessment clerks in April 2010. The content included
aspects on improving employee awareness and imparting better understanding of system processes,
cross verification, return scrutiny and check post verifications etc. The training was conducted for 3 to 4
batchers with each 100 participants for one week. There have been continuous training programs by
Impact assessment of tax automation of CTD, Kerala I Page 43 of 105
system administrators of the department to other divisions of the department like intelligence wing and
assessment wing.
Four day training was conducted for the call center employees by the information management cell
(ITMC) staff on areas related to frequently asked questions in KVATIS and other Process Manual related
queries.
Fourteen days training was given to employees of Akshaya Kendra, the citizen service centers across the
14 districts of the state. Training was also imparted to all district coordinators and employees from
assessment wing. The contents for training ranged to general understanding of KVATIS system to
detailed process flow, and administrative details. Various user manuals have been prepared on e-
payment, E-filing, Trouble shooting and general tutorials.
Details of training provided by GIFT over the last 5 years
Year. Name Of The Programme Cadre Of The Officials
Trained
No. of
Batches /
Days
Total
Particip
ants
2005-06
Training on Kerala Value Added
Tax Statutory Forms
Asst. Commissioners,
Commercial Tax Officers,
Inspectors & UD/LD Clerks
36 2537
2006-07 District Level Training on KVAT
Forms
Asst. Commissioners /
Commercial Tax Officers 10 650
2006-07 Training on Works Contract Panchayat Staff 1 180
2006-07 Direct CTO training on KVAT
Act & Rules Commercial Tax Officers 2 90
2006-07 Works on VAT Forms
Restructuring
Dy. Commissioners / Asst.
Commissioners & Faculty,
CTS
14 15
2006-07 Head Quarters Staff training on
KVAT
Superintendent, Head
Clerks, U.D. Clerks 1 60
2006-07 Computer Training / KVAT
Software Training
Asst. Commissioners /
U.D/LD Clerks 42 680
2007-08 Training on KVAT Software etc. Selected officials from
different cadres 18 648
2008-09 Training for System
Administrators System Administrators 3 110
2009-10 Training on e-filing of VAT
returns
Assistant Commissioners &
Commercial Tax Officers 7 210
2009 Training for Intelligence officers
All officers of Intelligence
wing 12 360
2009 Training for Check-Post Officials All Check post officials 9 270
2009 Training on e-filing of VAT
returns
Assistant Commissioners &
Commercial Tax Officers 7 210
Impact assessment of tax automation of CTD, Kerala I Page 44 of 105
5.1.2.1 Trainings planned
The department has been actively investing in continues training programs. Timely training has been one
of the sole reasons which made KVATIS success. The department has planned for a next phase of
training for 900 officers across state on providing Hands on experience on assessment and access of
MIS in the system. The department has also planned training for all typists (about 150 candidates) in the
department so as to make them direct contributors in the KVATIS.
5.1.2.2 Methodology and approach of training:
A class room based training methodology was adopted for training and each session consisted of both
theory and practical sessions. To ensure the effectiveness, session were done on real time case studies
from assessment.
Train the Trainer, one of the most scalable and cost effective mode was the approach used for training.
The system administrators and system supervisors were trained by the software system developers of
KVATIS who in turn trained the sampled crowed from various districts.
The content for training was finalised after due interaction with the dealers and employees. The training
covered all the detail pertaining to e-Services, mainly the process flow and procedural details.
5.1.2.3 Training Review
Review studies are conducted every 3 months from the commissionerate to understand the effectiveness
of the training imparted. Each employee was asked to present a case to elaborate how each case were
scrutinized and verified.
5.1.3 Investments in IT
There has been considerable shift in investments in hardware and software investment over the years.
Considerable amount of 0.07% of the revenue collected by the department was kept aside for hardware
capacity building and software development during the starting of the project (FY-2006-07). As the
system was stabilized there has been moderate level of investments in the subsequent years. In year
2009-10 about 0.02% of the revenue was allocated for capacity building. Over the four years 82,800,212/-
Rupees was spent on building hardware capacity and Rs 58,985,995/- on software developments.
5.1.3.1 Hardware Investments
Expenditure 2006-07 2007-08 2008-09 2009-10 Total
Hardware Purchase for Data Centre
25,977,159.18 4,401,322.02 1,003,620.00 7,200,000.00 38,582,101.20
Hardware Purchase for HQ 951,548.04 - - - 951,548.04
Hardware Purchase for Offices 19,568,000.00 - - 23,698,563.00 43,266,563.00
Total 46,496,707.22 4,401,322.02 1,003,620.00 30,898,563.00 82,800,212/-
Impact assessment of tax automation of CTD, Kerala I Page 45 of 105
5.1.3.2 Software Investments
Expenditure 2006-07 2007-08 2008-09 2009-10 Total
Oracle License and annual
technical support( ATS)
11,232,000.00
22,915,425.00 7,762,750.00 - 41,910,175
Software Development by M/s.
CMC Ltd. 2,800,000.00 9,800,000.00 2,080,000.00
1,400,000.00 16,080,000
Antivirus from Symantec 95,820.00
995,820.00
Total 15,027,820 32,715,425 9,842,750 1,400,000 58,985,995
5.1.3.3 Network Investments
Investments were made on network development and establishment. A total of 65 Lakh has been spent to
build a wide area network connecting all the administrative and geographical scope of Commercial Tax
Department. The intranet for KVATIS is accessible though WAN setup as part of this networking building
initiative.
Expenditure 2006-07 2007-08 2008-09 2009-10 2010-11
Total
Wide Area Network by M/s.
Frontier Business System
7,740,721.00 12,107,825 115,803 115,803 2,300,000 22,380,152
Lease Line by BSNL 95,645.00 6,978,143 ,615,265 22,663,598 8,900,000 43,352,651
Total 7,936,366 19,085,968 4,731,068 22,779,401 11,200,000 65,732,803
The graphs depicts the return on IT investment over the years. The decrease in return in the last year can
be attributed to major investments in hardware for future years.
Impact assessment of tax automation of CTD, Kerala I Page 46 of 105
The investments in hardware, software and networking activities has been considerably low (0.05%) with
respect to the amount of revenue collected by the department
A large extent of investments is expected in coming years for replenishing the old systems in place, new
set of servers for disaster recovery and additional computers for increasing the extent of IT and
computerization in the department.
5.1.4 Investment in awareness programs and communication plans
During the project initiation phase, considerable amount of Rs 900/-lakh was spent on improving and
inculcating awareness of KVATIS to all stakeholders. Awareness and this clear communication of benefits
to the stakeholders have enabled a smooth transition from manual process to KVATIS system.
The awareness was done through various modes like, newspaper advertisements, Advertisements in FM
radio and Televisions, Online advertisements in the Official site, Distribution of Pamphlets and other
Operational Manuals. One-on-One, Word of mouth was the one of the most effective approach wherein
the employees was the instruments of awareness.
Investment Particulars in awareness programmes Amount
Advertisement through electronic media 83,464,889.00
Advertisement through print media 6,576,468.00
Total 90,041,357.00
1250.611723.29
7428.32
2396.64
2006-07 2007-08 2008-09 2009-10
Returns on IT investment (in Rs)
0.09%0.08%
0.02%
0.06%
2006-07 2007-08 2008-09 2009-10
IT investment as a percentage of revenue collected
Impact assessment of tax automation of CTD, Kerala I Page 47 of 105
5.1.5 Communication Plans- Via Government Orders
For the successful integration and hassle-free deployment, timely Government orders were
communicated to ensure a smooth flow and integration of new modules in the KVATIS Project
Audit Reports and Statements – November 2010
Renewal of Registration and filing option for payment of tax at compounded rates – 30.04.2010
Downloading Statutory forms- 01.02.2010
e-Payment of taxes - Revised schedule issued for filing of returns – 10.09.09
e-payment of Tax
e-filing of VAT Returns
Table: Revised schedules for filing of returns
Sl.N Particulars Extended Time limits
1 Every dealer whose annual net tax payable for the preceding year was rupees ten lakh and above
On or before the fifteenth day of the month following the return period
2 Every dealer whose annual net tax payable for the preceding year was above Rupees two lakh but below Rupees ten lakh
On or before the twentieth day of the month following the return period
3 Every dealer whose annual net tax payable for the preceding year was above Rupees twenty five thousand but below Rupees two lakh
On or before the twenty-fifth day of the month following the return period
4 Others On or before the twenty-fifth day of the month following the return period
Most of the new changes and extensions have been made based on the inputs received from various
trade associations like the Institute of Chartered Accountants and Sales Tax Practitioners Association.
Impact assessment of tax automation of CTD, Kerala I Page 48 of 105
5.2 Organizational structure of CTD present/ prior to KVATIS
5.2.1 Organisational chart before computerization
5.2.2 Organisational Structure after KVATIS/Computerization
ITMC CELL
AC( ITMC)
System supervisor/ System
administrators
Impact assessment of tax automation of CTD, Kerala I Page 49 of 105
To manage the IT related queries and train all employees of the department, a special wing called ITMC-
Information management cell was established in year 2005.
Then existing Computer Wing functioning of the Commissionerate was designated as the Information
Technology Management Cell of the Department. The Assistant Commissioner (Training) was made
charge of the Information Technology Management Cell.
The Department constituted IT Management Cell consisting of technical members from within the
Department to monitor the progress of implementation of the project, its administration and Change
Management. IT Management Cell performs the key aspect of co-ordination of the various entities
involved in accordance with SLAs and ensuring the stakeholder participation. The IT Management Cell
functions in close association with the Department leadership. System Administrators are deployed in 14
districts to administer district level project implementation in close association with administrative heads. It
consists of system supervisors and system administrators. These people are well trained and well versed
with technology. In the initial phase of KVATIS, technical members were identified by department across
the various districts. These resources were trained and were given responsibility of each district. All IT
and KVATIS related issues were handled by these specialized resources. After the KVATIS initiatives
have stabilized, these resources were re-assigned from all districts and were centrally deployed in State
headquarters.
5.2.3 Roles and responsibilities of ITMC
Nodal agency in the Commercial Taxes Department to coordinate the IT-related activities of all
the vendors contracted by the Department
Monitor and guide all purchase orders issued by the Commercial Taxes Department for IT
hardware and software
Monitor the post-delivery performance of the vendors as per the purchase order, agreement/SLA
and take up with the vendor in any case of deficiencies in service delivery.
Render progress report on the services rendered by the various vendors from time to time
Impact assessment of tax automation of CTD, Kerala I Page 50 of 105
6 Impact Assessment Framework
6.1 Impact Assessment for tax payers and agents
Dimension Indicator
Economic Costs
Human effort required in filing of returns/ tax payment regarding commodity
classification, tax rates, tax computation, concessions, exemptions etc
Volume of Paper works required
Proficiency of Accounting required
Financial and compliance cost of filing returns
Time spent for filing of returns
Better Governance Access to statutory forms
Supervision and control over business accounts
Less instances of denial of service
Quality of services Promptness in updation of accounts
Department's responsiveness to queries/problems
Frequency of occurrence of errors in filing returns/ tax payment
User Friendliness of KVATIS
6.1.1 Quantitative analysis
To understand the qualitative aspects of effectiveness the following parameters were measured.
Dimension Indicator
Cost effectiveness Number of visits to CTD offices
Financial cost of filing returns
Time effectiveness Time spent for filing of returns
Practitioners - Cost effectiveness Increase in number of clients after KVATIS
Impact assessment of tax automation of CTD, Kerala I Page 51 of 105
6.2 Impact Assessment for employees of Commercial Tax Department
6.2.1 Quantitative Analysis
Dimension Indicator
Economic Increased revenue and tax collection
Number of discrepancies/offences detected per month
Additional Revenue through scrutiny/verification
Number of files scrutinized/verified per month
Better Governance Improvement in efficiency of work
Intra/inter departmental co-ordination/ exchange of information/data sharing
Office automation
Report generation/ MIS
Volume of Paper works required
Time spent for scrutiny/verification
Frequency of occurrence of errors in filing returns/ tax payment
Number of Visits of tax payers to CTD offices
Contribution to organizational goals Inclusion of new services by the commercial tax department
Grievance handling and responsiveness of tax payers to queries/defects
Employee Perspective Work morale and self esteem
Workload of Employees
Training availed for e-governance
6.2.2 Qualitative Analysis
Dimension Indicator
Work load Number of discrepancies/offences detected per month
Time spent for scrutiny/verification
Volume of Paper works required
Impact assessment of tax automation of CTD, Kerala I Page 52 of 105
6.3 Impact Assessment for Commercial Tax Department
Dimension Indicator
Effectiveness Tax collection over the last 5 years
Month wise revenue collection over last 3 years
Increase in tax base- number of returns filed
Number of live dealers ( Expected vs Actual)
Number of services availed in e-payment over last two years
Number of consignment declarations over last two years
Return per employee
Trend of payments- Offline/Online
Trend in interstate transaction details-Data capture
Return on investments
6.3.1
6.3.2 Other quantitative key statistics post automation
Dimension Indicators
Helpline effectives and support Number of Call per month in toll free numbers and other
telephonic help lines
Usage of emails
Website effectiveness Number of Page visits
Kind of information modules provided
Size of the website (In pages)
Impact assessment of tax automation of CTD, Kerala I Page 53 of 105
7 Impact Assessment of KVATIS
7.1 Dealers and Tax practitioners
7.1.1 Economic Cost Impact
Indicators
% of dealers
agreeing that
KVATIS have
improved the
service
delivery
% of STP’s
agreeing
that KVATIS
have
improved
the service
delivery
Statistical Z- test
Confidence levels
Is there a significant impact or
not?
95% 99%
Dealer
s STP’s
Deal
ers
STP’
s
Human effort required in filing of returns/ tax payment regarding commodity classification, tax rates, tax computation, concessions, exemptions etc
59% 42% Yes Yes Yes Yes
Volume of Paper works required (reduced) 73% 41%
Yes Yes Yes Yes
Frequency of occurrence of errors in filing returns/ tax payment
60% 51% Yes Yes Yes Yes
Financial and compliance cost of filing returns 47% 17%
Yes Yes Yes Yes
Time spent for filing of returns 70% 40% Yes Yes Yes Yes
The practitioners have rated human effort and financial cost and time spent to have increased with
KVATIS and this can be attributed to the increase in the clientele and the effort required in filing a
complete and accurate returns. Previously owing to the administrative and manual processes, department
hardly could check the compliance of all dealers within the limited time and lot of compliance issues
existed within the system.
Presently department has put restrictions on number of revisions in filing a return to ensure that not much
of bogus or window dressed details are inputted into the system. Now if the returns are not filed with
adequate information and accurate details, the KVATIS system automatically generates NOTICES.
Hence it requires more effort for a practitioner to adhere to the rules and coherence of information but the
same is in-line with increasing the tax compliance.
Impact assessment of tax automation of CTD, Kerala I Page 54 of 105
7.1.1.1 Qualitative response- Dealers Perspective
7.1.1.2 Qualitative responses- Practitioners Perspective
0.0
1.0
2.0
3.0
4.0
Human effort required in filing of returns
Volume of Paper works required
Frequency of occurrence of errors in filing
returns/ tax payment
Financial and compliance cost of filing returns
Time spent for filing of returns
Dealers Pespective
Before e-governance
After e-governance
0.0
1.0
2.0
3.0
4.0
Human effort required in filing
of returns
Volume of Paper works required
Frequency of occurrence of errors in filing returns/ tax
payment
Financial and compliance cost of filing returns
Time spent for filing of returns
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 55 of 105
7.1.2 Better Governance and Service levels
Indicators
% of dealers agreeing that KVATIS have improved the
service delivery
% of STPs agreeing
that KVATIS
have improved
the service delivery
Statistical Z- test Confidence levels
Is there a significant impact or not?
95% 99%
Dealers STP Dealer
s STP
Access to statutory forms 80% 88% Yes Yes Yes Yes
Supervision and control over
business accounts 88% 93%
Yes Yes Yes Yes
Promptness in updation of
accounts 88% 93%
Yes Yes Yes Yes
Department's responsiveness to
queries/problems 81% 69%
Yes Yes Yes Yes
Frequency of occurrence of
errors in filing returns/ tax
payment 60% 51%
Yes Yes Yes Yes
The stakeholders have rated access to statutory forms, supervision and promptness of accounts to be
highly improved with the advent of KVATIS system. Previously in the manual process the errors while
filing was restricted to commodity entries and other major issues, currently with the advent of KVATIS, the
system generates notices for small issues like data formatting and other compliance hence increasing the
number of error occurrences. Eg. If required date format is dd-mm-yyyy, the system will generate notices
for any format different from the above specified format.
Impact assessment of tax automation of CTD, Kerala I Page 56 of 105
7.1.2.1 Qualitative responses – Dealers
7.1.2.2 Qualitative responses –Practitioners
7.1.3 Increase in number of clients for practitioners
More than 95% of the practitioners have reported that there have been a considerable number of
increases in number of clients after the advent of KVATIS system. This can be attributed to factors like
the level of computer literacy required in filing the services. Even though Akshaya Kendras were assigned
to help the taxpayers in availing the services, owing to the lack of technical competency and lack of
proficiency in the tax matter, there has been a lot of shift in taxpayers from Akshaya Kendras to tax
practitioners.
0.0
1.0
2.0
3.0
4.0
Access to statutory forms
Supervision and control over business
accounts
Promptness in updation of accounts
Department's responsiveness to queries/problems
Dealers
Before e-governance
After e-governance
0.0
1.0
2.0
3.0
4.0
Access to statutory forms
Supervision and control over business
accounts
Promptness in updation of accounts
Department's responsiveness to queries/problems
Practitioners
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 57 of 105
7.1.4 Effectiveness of KVATIS- Dealers and practitioners
The dimensions rated in descending order of effectiveness for dealers are as below.
Supervision and control over business accounts/ Inventory
Promptness in updation of accounts
Volume of Paper works required
Time spent for filing of returns
Access to statutory forms
Department's responsiveness to queries/problems
Human effort required in filing of returns/ tax payment etc
Frequency of occurrence of errors in filing returns/ tax payment
Financial cost of filing returns
The dimensions rated in descending order of effectiveness for practitioners are as below.
Supervision and control over accounts
Promptness in updation of accounts
Access to statutory forms
Number of visits to CTD offices
Frequency of errors
Volume of Paper works required
Department's responsiveness to queries
This implies that supervision and promptness of updation of accounts has been the most effective aspect
of KVATIS for dealers and practitioners. As per dealers, there is not much substantial change or impact in
financial cost with the advent of KVATIS.
The magnitude of Z score at 99% confidence was used for analyzing the level of impact in dimensions.
5%
66%
20%8%
1%
Percentage growth in number of clients
Zero or negative growth
Upto 25% growth
upto 50% growth
upto 75% growth
100% or More growth
Impact assessment of tax automation of CTD, Kerala I Page 58 of 105
7.1.5 Factors responsible for adoption of KVATIS
The various factors responsible for easy adoption of KVATIS by dealers were analyzed.
The assessment framework was:
Dimension Indicators
Factors that facilitated your switch to e-services
Computer Literacy
Availability of proficient manpower
Easiness of KVATIS System
Departmental assistance
Cost efficiency
The various parameters were identified for enabling this easy transition. The parameters rated high are
computer literacy of the state and easiness of KVATIS system. Kerala is the most literate state in India,
with 94.59% literacy. The computer literacy for the state is also high with respect to other states. Most of
the dealers being interviewed where well versed with computer and other technology. Being
technologically savvy, taxpayers understand the importance of computerization and it‟s potential.
Computer Literacy
21%
Availability of proficient
manpower20%
Easiness of KVATIS System
21%
Departmental assistance
19%
Cost efficiency19%
Factors - Adoption of KVATIS
Impact assessment of tax automation of CTD, Kerala I Page 59 of 105
.
7.1.6 Impact of Awareness programmes carried out by department
Dealers have rated direct awareness programmes by the department via word of mouth; via training was
the most effective means of awareness. The direct interaction has enabled the department to impart the
benefits of KVATIS system, the cost effectiveness and ease of maintenance and other governance
1% 6%
35%
47%
11%
Computer Literacy
Very Low
Low
Average
High
Very High
5% 6%
38%41%
10%
Availability of proficient manpower
Very Low
Low
Average
High
Very High
Very Low0%
Low6%
Average41%
High49%
Very High4%
Easiness of KVATIS System
2%
13%
49%
31%
5%
Departmental assistance
Very Low
Low
Average
High
Very High
3%
17%
51%
23%6%
Cost efficiency
Very Low
Low
Average
High
Very High
Impact assessment of tax automation of CTD, Kerala I Page 60 of 105
factors. There was frequent advertisement made in print media- both in regional newspapers and English
newspapers to ensure the reach of awareness.
Practitioners have found online help/tutorials and Departments assistance as the factors which have
given them the remote support to move to KVATIS system.
The below graphs depicts the cumulative responses from dealers and practitioners.
Audio-visual Media 16%
Print Media17%
Online Services
18%
Handouts/ Pamphlets
14%
Helpdesk/Helpline16%
Departmental assistance
19%
Awareness
Very Low15%
Low27%
Average36%
High17%
Very High5%
Audio-visual Media
Very Low9%
Low24%
Average41%
High21%
Very High5%
Print Media
Impact assessment of tax automation of CTD, Kerala I Page 61 of 105
7.2 Employees of commercial tax department
7.2.1 Better Governance
Indicators
% of employees agreeing that KVATIS have improved the
service delivery
Statistical Z- test Confidence levels
Is there a significant impact or not?
90% 95% 99%
Number of discrepancies/offences detected per month 88%
Yes Yes Yes
Additional Revenue through scrutiny/verification 95%
Yes Yes Yes
Intra/inter departmental co-ordination/ exchange of information/data sharing 97%
Yes Yes Yes
Office automation
98%
Yes Yes Yes
Very Low5%
Low18%
Average45%
High27%
Very High5%
Online Services
Very Low18%
Low29%
Average43%
High8%
Very High2%
Handouts/Pamphelts
Very Low11%
Low24%
Average44%
High17%
Very High4%
Helpdesk/Helpline
Very Low7%
Low14%
Average41%
High29%
Very High9%
Departmental assistance
Impact assessment of tax automation of CTD, Kerala I Page 62 of 105
Report generation/ MIS
95%
Yes Yes Yes
Volume of Paper works required
71%
Yes Yes Yes
Time spent for scrutiny/verification
59%
Yes Yes Yes
Frequency of occurrence of errors in filing returns/ tax payment 76%
Yes Yes Yes
It was observed that all employees are not given access to all information‟s /details and are not well
versed with technicalities of report generation. It was reported that the navigation aspect and the
availability of relevant information to selected group of employees is demanding more time for scrutiny.
7.2.1.1 Qualitative scale of responses by employees
0
1
2
3
4
Number of discrepancies/offences
detected
Additional Revenue through
scrutiny/verification
Intra/inter departmental co-
ordination/ exchange of information
Office automation
Report generation/ MIS
Employees
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 63 of 105
7.2.1.2 Qualitative scales of responses for parameters
7.2.2 Contribution to organizational goals
Indicators
% of employees agreeing that KVATIS have improved the
service delivery
Statistical Z- test Confidence levels
Is there a significant impact or not?
90% 95% 99%
Intra/inter departmental co-ordination/ exchange of information/data sharing 97%
Yes Yes Yes
Grievance handling and responsiveness of tax payers to queries/defects 91%
Yes Yes Yes
Number of Visits of tax payers to CTD offices 80%
Yes Yes Yes
Additional Revenue through scrutiny/verification 95%
Yes Yes Yes
The inter-departmental coordination has increased as the KVATIS system enables easy information
management and reports from the system. The information from KVATIS is used by income tax
department, audit and verification team within department and other state commercial tax departments
also.
0
1
2
3
4
Volume of Paper works required
Time spent for scrutiny/verification
Frequency of occurrence of errors in filing returns/ tax
payment
Employee
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 64 of 105
7.2.2.1 Qualitative scale of responses by employees
7.2.3 Employee productivity and morale
Indicators
% of employees agreeing
that KVATIS
have improved
the service delivery
Average of the qualitative responses Statistical Z- test
Confidence levels Is there a significant
impact or not?
Before e-
governance
After e-
governance 90% 95% 99%
Work morale and self esteem/Office automation
94% 2.8 3.7 Yes Yes Yes
Work Load of employees 51% 3.8 3.4 Yes Yes Yes
Interactions with employee during one-on one interviews and focus group discussion, it was reported that
the work load has increased tremendously with respect to the quality and kind of effective scrutiny. This is
because of the increased sample size of verification and increased tax base.
They also reported that the work load of non–productive functionalities like maintaining voluminous
registers and tedious job of reconciliation etc have reduced tremendously giving amble time for effective
verification and scrutiny of the files thus enhancing the tax compliance.
0
1
2
3
4
Intra/inter departmental co-ordination/ exchange of
information/data sharing
Grievance handling and responsiveness of tax payers
to queries/defects
Additional Revenue through scrutiny/verification
Employees
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 65 of 105
7.2.4 Effectiveness of each parameter KVATIS – Employees
The dimensions rated in descending order of effectiveness for employees are as below.
Responsiveness of tax payers to queries
Improvement in efficiency
Intra/inter departmental co-ordination
Number of discrepancies/offences detected per month
Additional Revenue by scrutiny/verification
Report generation/ MIS
Work morale and self esteem
Office automation
Volume of paper works
Time spent for scrutiny
This implies that improvement in efficiency, the level of inter-intra departmental coordination‟s has been
the most effective aspect of KVATIS for employees and there is not much substantial change or impact in
time spent for scrutiny with the advent of KVATIS.
The magnitude of Z score at 99% confidence was used for analyzing the level of impact in dimensions.
7.2.5 Training effectiveness
The training effectiveness is analyzed based on the following parameters- Adequacy of training Content,
Relevance of the content trained , frequency of trainings and follow on trainings.
Very Low3% Low
12%
Average49%
High30%
Very High6%
Adequacy of Content
Very Low2%
Low8%
Average41%
High39%
Very High10%
Relevance
Impact assessment of tax automation of CTD, Kerala I Page 66 of 105
In overall training effectiveness was rated average.
7.3 Overall rating of KVATIS
7.3.1.1 Dealers perspective
Very Low4%
Low18%
Average45%
High26%
Very High7%
Follow up
Very Low5%
Low17%
Average55%
High17%
Very High6%
Frequency
Adequacy of Content
25%
Relevance 27%
Follow up 24%
Frequency24%
Training effectiveness
1% 5%
31%
56%
7%
Overall rating of KVATIS- Dealers
Very Low
Low
Average
High
Very High
More than 60% of the total dealers sampled have
rated KVATIS application as highly effective. 30%
of the dealers have rated it as average owing to
the hardship of submitting the return hardcopy. All
factors like easiness, transparency, and better
governance and service levels are the
parameters which enabled KVATIS to be effective
and successful.
Impact assessment of tax automation of CTD, Kerala I Page 67 of 105
7.3.1.2 Practitioners perspective
7.3.1.3 Employees perspective
7.3.2
7.4 Commercial Tax Department
7.4.1 Increase in revenue collection
7%
13%
20%
27%
33%
Overall rating of KVATIS- Practitioners
Very Low
Low
Average
High
Very High
Very Low0%
Low2%
Average41%
High50%
Very High7%
Overall rating of KVATIS - Employees
0%
5%
10%
15%
20%
25%
2005-06 2006-07 2007-08 2008-09 2009-10
Pe
rce
nga
te g
row
th
Percentage growth in revenue collection
More than 60% of the total practitioners
sampled have rated KVATIS application as
highly effective. All factors like easiness,
transparency, and better governance and
service levels are the parameters which
enabled KVATIS to be effective and
successful.
More than 57% of the total employees
sampled have rated KVATIS application as
highly effective. All factors like easiness,
transparency, and better governance and
service levels are the parameters which
enabled KVATIS to be effective and
successful.
Impact assessment of tax automation of CTD, Kerala I Page 68 of 105
Year Collection (Rs. Crores) Absolute Increase in
collection (Rs. Crores)
2004-05 6701.05
2005-06 7037.97 336.92
2006-07 8563.31 1525.34
2007-08 9371.76 808.45
2008-09 11377.13 2005.37
2009-10 13200.19 1823.06
(Src. Budget in brief, Government of Kerala)
Compounded annual growth rate (CAGR) of revenue collection over the last 5 years is 17%. This growth
was despite the recession in the previous years.
7.4.2 Month wise revenue collection for the last 3 years
April May June July Aug Sept Oct Nov Dec Jan Feb Mar
2007-08 475 755.23 799.73 751.33 648.73 834.47 750.37 726.32 758.19 893.27 883.32 1409.4
2008-09 532.03 920.91 966.1 876.57 923.52 994.69 1033 955.05 911.43 973.8 973.65 1510.7
2009-10 588.6 1007.3 1039 994.46 1016.8 1178.1 1041.7 1057.5 1028.1 1201 1223.5 1824
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Re
ven
ue
co
llect
ion
(in
Rs.
cr)
Month wise revenue collection
Impact assessment of tax automation of CTD, Kerala I Page 69 of 105
7.4.3 Increase in tax base (number of returns filed)
Year Filed Returns Absolute Increase in
tax base
2005-06 323258
2006-07 453874 130616
2007-08 633425 310167
2008-09 918368 595110
2009-10 1584859 1261601
2010-11 (Projected) 1786405 1463147
Compounded annual growth rate (CAGR) of tax base over the last 5 years is 40.76%
The number of registered dealers in the state was as follows:
Financial Year Registered Dealers
2005-06 75238
2006-07 110982
2007-08 128512
2008-09 143477
2009-10 163840
2010-11 173642
The below graphs depicts the number of return which are actually filed with number of people who are
expected to file the returns. There has been substantial reduction in number of people who used to evade
tax or who followed manual procedures in the initial years. This has been achieved by the department
through initiatives like identifying the people those who are not filing tax via KVATIS module and
personally following and clarifying with the tax payers.
0.0%
50.0%
100.0%
150.0%
2006-07 2007-08 2008-09 2009-10 2010-11 (Projected)
Increase in tax base
Impact assessment of tax automation of CTD, Kerala I Page 70 of 105
7.4.4 Increase in the number of services availed
0
500000
1000000
1500000
2000000
2500000
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Increase in Tax base-dealers
Expected number of return filed
Actual number of files returned
0
100000
200000
300000
400000
500000
600000
700000
From Jan - Sept 2009
From Jan-Sept 2010
e-Payment of Tax
850000
900000
950000
1000000
1050000
1100000
From Jan - Sept 2009
From Jan-Sept 2010
e-Uploading of Invoices
Impact assessment of tax automation of CTD, Kerala I Page 71 of 105
7.4.5 Trend in online vs Offline payment - Based on the amount of transactions per year
The 1% of the offline payments in 2010 can be attributed to payments from the following areas:
Compounding fees
Payments against assessment
New registration charges, the new registration process is manual including all field visits/
investigations etc,
Security deposits etc
There has been considerable reduction in number of offline payments over the years.
Payment Modes 2008-09 2009-10 2010- April
till September
Cash 5806 1855 40
Challan 217447 86078 1322
Demand Draft 56252 25146 401
Cheque 484445 182488 2561
7.4.6 Trend in interstate
transactions
Financial Year
Interstate transactions
2006-07 68139
2007-08 587221
2008-09 980223
2009-10 972428
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
2008 2009 2010- April till September
Online Payment
Offline Payment
0
500000
1000000
1500000
2006-07 2007-08 2008-09 2009-10
Inter state transactions
Impact assessment of tax automation of CTD, Kerala I Page 72 of 105
Through KVATIS check post module, it has been possible to capture substantial details of interstate
transactions over the years. The compounded annual growth rate (CAGR) of interstate transaction over
the last 4 years is 143%. It was reported that there has been a consolidation in the travel vehicles and
hence there has been stagnation in number of transactions but the value of transactions has increased
over the years.
7.4.7 Fund utilized for Akshaya Kendra- Filing of Returns
(Src: C Section, Commercial Tax Department)
On a yearly basis an amount of 5.5crores has been kept aside for paying the Akshaya Kendras for the
service rendered by them to the taxpayers. Over the year 2009-10 the number of returns filed has
reduced by 27%. This can be attributed to the increase in departmental assistance and user friendliness
of KVATIS system and hence the increase in comfort ability of taxpayers in filing returns themselves
January to July2009 January to July 2010
Series1 3888483 3671276
3550000
3600000
3650000
3700000
3750000
3800000
3850000
3900000
3950000
In R
up
ee
s
Amount utilized- Returns filed through Akshaya Kendra
0
10000
20000
30000
40000
50000
60000
70000
80000
Jan-March 2009
Apr-June 2009
July-Sep 2009 Oct-Dec 2009 Jan-March 2010
Nu
mb
er
of
retu
rns
file
d
Returns filed through AkshayaKendra
Impact assessment of tax automation of CTD, Kerala I Page 73 of 105
The utilization rate for FY 2009-10 has been very low, only 10.3% of the total fund allotted for CSC‟s in
providing services to taxpayers has been utilized so far. Out of 5.5crores allotted only 56 lakh was the
total utilization. This implies that the there has been a drastic reduction in taxpayers availing the help of
third party agents for filing returns.
Return per employee
Particulars 2005-06 2009-10
Revenues (Rs. in Crore) 7037.97 13200.19
Total number of employees (Including all cadre) 4526 4613
Total number of employees (Excluding all indirect contributors) 3123 3165
Revenue collection per Employee(Including all cadre) 1.56 2.86
Revenue collection per Employee(Excluding all indirect contributors) 2.25 4.17
There has been an increase of more than 85% in
the revenue collected per employees with or
without the indirect contributors‟ of the departments
in the last 5 years. The department has planned for
a training program to make some of the indirect
contributors‟ like typist, almost 150 candidates to be
well versed with KVATIS so as to reduce the
workload of existing employees of the department.
7.4.8 Employee productivity
There is 21.3% increase in number of files scrutinized by the employees after the advent of KVATIS. This
is owing to the ease of computerization and availability of relevant information‟s in a click. There are no
reference made to the files of each of the dealers, all information are available in system and hence
scrutiny is made at ease.
Before the introduction
of e-governance
After the introduction of
e-governance (KVATIS)
Number of files scrutinized/verified
per month 49 63
The effectiveness of scrutiny has quadrupled over the four years from 20% to 80%. Previously the
scrutiny was based on sampling and after KVATIS every 3 months it has been mandated that all the
1.56
2.862.25
4.17
2005-06 2009-10
Revenue per employee
Including all cadre
Excluding all indirect contributors
Impact assessment of tax automation of CTD, Kerala I Page 74 of 105
cases meant for each employee is scrutinized. This is over and above the increase in tax base of more
than 40% over the last 5 years. Drudgery of work has also decreased with the advent of KVATIS.
7.4.9 User friendliness of KVATIS system
One of the other parameter studied in the survey was the user friendliness of KVATIS software
application. All the parameters namely the ease of navigation was one of the most effective parameter.
This implies that relevant information are available without much hassle of to-and- fro movements within
the system. The other parameters were also rated high namely the look and feel, availability of relevant
information‟s and online help and tutorials.
The graph below depicts the overall result from all stakeholders collectively namely dealers, tax
practitioners and employees.
The ease of navigation and look are feel has been rated average to high. The help provided online and
offline has been considered as a major attribute in the KVATIS system and has been rated above
average by all the three set of stakeholders.
.
3% 10%
44%
34%
9%
Ease of Navigation
Very Low
Low
Average
High
Very High
2% 7%
48%33%
10%
Look and feel
Very Low
Low
Average
High
Very High
10%
22%
42%
23%
3%
Help-online/offline
Very Low Low Average High Very High
6%
15%
43%
29%
7%
Availability of relevant information
Very Low Low Average High Very High
Impact assessment of tax automation of CTD, Kerala I Page 75 of 105
7.5 Other key statistics
7.5.1 VAT Helpline - effectives and support
VAT- HELPLINE started as Instant redressal of queries raised by the dealers & tax practitioners was quite
inevitable for the smooth administration of VAT. Telephonic redressal played an important role in this
regard. Citizens can lodge their doubts/complaints through telephone, which would be recorded along
with generation of token numbers. The system was designed to ascertain the status of their complaints
using the token number generated. A dedicated computerized citizen call center is in place for supporting
the dealers to raise their grievances and technical queries, to disburse the right information at the right
time to the needy and also to ensure transparency. The role of citizen call center is limited to general
queries and for more detailed clarifications the department provided 24*7*365 toll free helpline service to
dealers. The VAT Helpline assists the dealers through e-mail as well as over phone to clear the doubts
relating to VAT Act and Rules. The IT Management Cell (ITMC) provides technical assistance on issues
relating to e-Filing & e-Payment through e-mail as well as over telephone. The e-SMS facility, which is an
exclusive SMS Gateway, enables the Department to communicate messages instantly to trade groups
and officials.
The trend in helpline and email queries was in-line with the various developments within the KVATIS
system. The numbers of calls were close to 200+ in the initial months and as system matured the number
of calls stabilized to an average of 30 calls daily. With the introduction of e-payment the number of
redressal requests again increased and the queries were mainly related to opening of bank accounts and
other general grievance issues of department‟s responsiveness and process and procedures etc. There
was a toll free number (BSNL) and a general number 9446505527 for all telephonic help lines.
The two emails used for helpline was [email protected] and [email protected] and was
operational from January 2006 onwards. Initially the helpline dealt with all queries related to VAT and was
later adopted for KVATIS application. The number of emails ranged from 30-40 emails daily in the peak
times.
The Tax Information Exchange System (TINXSYS) implemented under the guidance of the empowered
Committee of State Finance Ministers provides a unique platform for the exchange of information across
the various Commercial Tax administrations. The dealer information details available in KVATIS are
regularly updated to TINXSYS database through a scheduled process, configured in the KVATIS server.
Seamless information exchange between States was a crucial aspect which required urgent attention and
has emerged as the key mechanism to prevent frauds related to inter-state trade.
7.5.2 Website details
The website has 962 pages including PDF files. There are totally 25 static pages and 6 pages out of it is
for public information‟s and messages and 19 static pages are intended for wed administration and
Impact assessment of tax automation of CTD, Kerala I Page 76 of 105
related works. There are totally 96 dynamic pages and 27 of them are for public and 69 dynamic pages
intended for Web site administration.
The below table depicts the categories of information‟s and the specific information available in the
website.
Broad category Specific information type Provided in the
website
General information
(1) Tax forms Yes
(2) Tax brochures/ guides Yes
(3) Tax law Yes
(4) Tax rulings yes
(5) Tax calculators Tax Rates provided
Specific focused tax (6) Media materials information yes
(7) Industry focused tax advice yes
Taxpayers‟ transactions (8) Tax returns yes
(9) Tax payments yes
Individual taxpayer /account/ record information (10) Accounting information yes
(11) Registration changes yes
Legal (12) Court decisions on tax matters yes
(13) Tax law yes
Legislation (15) References to recently approved or yes
pending legislation Tax Administration (16) Operational performance data no
(17) Speeches of senior officials. No
The transactions portion of the website is separated from the information portions by different security
levels. Client side encryption is utilized in the domain. The content management module is used for all
updations.
KVATIS web application is subject to the audit by STQC (Standardization, Testing & Quality Certification)
- a Government of India agency and monetary transactions are secured using VeriSign SSL (Secured
Socket Layer) Certification.
Impact assessment of tax automation of CTD, Kerala I Page 77 of 105
8 Challenges faced and measures taken
8.1.1 Non-availability of digitized dealer data
The success of a software application depends on the data and metadata inputted into the system. Non
availability of digitized date was a major hurdle in optimum utilization of KVATIS.
The department has strategized to start the data collection in specific formats so as to digitize the same
offline by the department. The department engaged team of System Administrators to develop and
implement tools for digitization of dealer details. The tools developed for registration applications could
electronically convert and created database of the relevant information‟s. There was backlog of more than
2 years in the initial phase of the project. The department has later mandated all dealers to file the
backlog returns.
8.1.2 Data Accuracy
The data entry was manual and hence typing mistakes and errors was a major issue in the database.
The digitized data was later provided to the dealers on-line and was asked to revert on any discrepancies.
The suitable corrections were made in the system based on the reports from dealers.
8.1.3 Resistance from stakeholders - employees
The majority of the department officials were less familiar to computer system and was reluctant to
change the procedures followed for years. Even after repeated instruction from top level officials there
had been various instances of hindrance and the same affected the progress of the project.
The department has come up with a new strategy to encourage the officials who supported the initiative
and penalize the officials who hindered the normal working. A 20:20 analysis was performed, whereby
the best performing and poor performing 20 officers are identified on a monthly basis. The poor
performing officers were imposed notices and memos while the best performing officers were given
recognition and appreciation.
8.1.4 Digital divide among trader community
The small trader community resisted the KVATIS initiate as majority didn‟t have computerized system for
their business. The department has provided free electronic filing facilities through Akshaya citizen
service centers to each of the traders.
8.1.5 Digital Divide among officers
Being new to computer systems, majority of the officials couldn‟t handle any technical issues and sorting
out technical issues was a problem. The department identified ITMC cell and had deputed a system
administrator in each district to help the officials in any technical issues.
The department has made continuous effort in providing relevant trainings to the officials.
Impact assessment of tax automation of CTD, Kerala I Page 78 of 105
8.1.6 Huge number of trading commodities
As per the requirement, the number of commodities exceeded 8000 numbers and dealers found it very
difficult and cumbersome to choose the appropriate commodity from this huge list.
The department has made measures to group the huge list of commodities to 309 commodities to ensure
proper filing was done by the taxpayers. This simplified the efforts required by the tax payers and
employees.
8.1.7 Implementation of e-Payment
The Trade organizations raised objection to open separate account in specific banks such as
State Bank of India („SBI‟) or State Bank of Travancore („SBT‟). The issue was solved by
providing the facility to dealers to open zero balance account to facilitate e-payment.
Dealers requested to extend the facility to other nationalized and Kerala origin banks. The
government has accorded sanction to extend the e-payment service to 11 other banks also, and
the same is under consideration of the Reserve Bank of India.
8.1.8 Multiple returns for the same period
A dealer had to submit separate returns under different Acts like KGST, VAT and CST Acts. The
department has mandated to integrate all returns to a single return
Impact assessment of tax automation of CTD, Kerala I Page 79 of 105
9 Areas of Improvement for KVATIS
9.1.1 Technical Issues
The system has to be re-defined with few technical changes in the application like enabling a means to
file quarterly returns for contractors as currently they are filing “NIL” dummy return for all months other
than quarterly returns.
9.1.1.1 Remedy taken by department
The department has a technical committee assigned for studying the technical issues and they are
making incremental changes in the KVATIS system on a regular basis.
9.1.2 Refund Mechanism
Currently the refund mechanism is not made online and hence is time consuming and delayed.
9.1.2.1 Remedy taken by department
The department has a module called Refund in the KVATIS system. As per the phased manner of
implementation the refund module is expected to be operationalised in the next 6-7 months.
9.1.3 Hardcopy submission
Currently all tax payers are requested to submit the hardcopy of returns filed on a monthly basis to the
department. This is mandated by the department to ensure a backup of data in the system as there are
no long term solutions made for disaster recovery. It was also reported by the sampled population that
financial cost of return filing has increased owing to the printouts and internet connectivity charges.
9.1.3.1 Remedy taken by department
Disaster Recovery: The department has a project in pipeline to make an optimum solution for disaster
recovery. Presently the data is back up in a remote location in Mumbai on a daily basis.
Digital Signature: The department has also envisaged bringing in digital signature to all the stakeholders
which in turn can help in eliminating the mandate of hardcopy submission.
Impact assessment of tax automation of CTD, Kerala I Page 80 of 105
10 References
Impact Assessment of e-Governance Projects by Department of Information Technology
Good practices in e-governance and Compendium on 12th National e-governance conference
Strategies for Improving the Take-up Rates of Electronic Services.pdf, Prepared by Forum on Tax
Administration Taxpayer Services Sub-group March 2006
SURVEY OF TRENDS IN TAXPAYER SERVICE DELIVERY USING NEW TECHNOLOGIES,
Prepared by Forum on Tax Administration Taxpayer Services Sub-group, OECD, Organisation for
Economic Co-operation and Development
Measurement of Taxpayer Services, Management of the VAT: Improving the Level of Compliance
using Performance Indicators Lessons for the Pacific Islands Countries, prepared by Director,
French Tax administration
Impact assessment of tax automation of CTD, Kerala I Page 81 of 105
11 Annexure
1. Details of engagement meeting held
Meetings with Head Office and Regional Officers of Department of Commercial Tax,
State head quarters Trivandrum
Circle office, Vanchiyoor
Office at peroorkada, Thiruvananthapuram
Office at Neyyatinkara, Nedumangadu
Circle office, Mattancherry
Circle office, Kannur
Circle office, Kozhikode
Circle office, Thrissur
Circle office, Ernakulam
Circle office, Kollam
Meetings with officials of Department of Commercial Tax at Check Post, Amaravila
Meetings with CMC vendors, Thiruvananthapuram
Meetings with faculty of GIFT, Kaimanam, Thiruvananthapuram
Akshaya Kendra – CSC Operators about e-filing and consignment declarations, Amaravila
Tax payers (traders/Dealers) – Trivandrum, Nedumangadu, Neyyatinkara, Mattancherry, Kannur,
Kozhikode, Thrissur, Ernakulam, Kollam
Tax advisors from Trivandrum, Nedumangadu, Neyyatinkara, Mattancherry, Kannur, Kozhikode,
Thrissur, Ernakulam, Kollam
Institute of Chartered Accountants of India, Trichur
Kamath and Kamath Associates , Trichur
General Secretary - All Kerala income tax & sales tax practitioners association,
Thiruvananthapuram
One-on one meeting with tax payers- through Random Sampling, Ernakulam
Lorry drivers at Check post, Amaravila
Greencard holders, Thalaserri
Kerala Vyapari Vyavasayi Ekopana Samithi, State President, Calicut
Kerala Chamber of Commerce and Industry, former president, Trivandrum
The Malabar Chamber of Commerce, Chamber House, Former President, Calicut
The Malabar Chamber of Commerce, Chamber House, Current President,
Indian Rubber Dealers Federation, President, Kottayam
All Kerala Tiles and Sanitary Dealers Association, President, cochin
All Kerala Distributors Association, president, Ernakulam
Trade Union (Kerala GO), State General secretary
Trade union (NGO Union) ,representative
Impact assessment of tax automation of CTD, Kerala I Page 82 of 105
Institute of Chartered Accountants of India, Trichur
Indian Rubber Dealers Federation, President, Kottayam
2. Questionnaire for Dealers/Tax payers
Questionnaire- Dealers
Name of the respondent: (optional)
Name of the Business Entity:-
District
Rural/Urban
Commodity.
1. Gold/Jewellery
Sector
Manufacturer
2. White goods/ Electrical/ Electronic Wholesaler
3. Readymade garments Retailer,
4. Rubber and rubber products Distributor/stockist
5. Iron and Steel/Hardware /Paint
Tick the appropriate channel of e-service
Self
6. Cement CA/ Advocates/Tax Practitioner
7. Provisions Through Akshaya Kendra
8. Motor Vehicles
Annual total turnover of the business
(2009-2010)
<10 Lakhs
9. Petrol/ liquor >10<50 Lakhs
10. Timber/Plywood/Glass/Hill Produce >50 Lakhs
Sl.N Questions Tick the appropriate scale
1
Access to statutory forms V.Low Low Average
High V. High
Before e-service
After e-service
2
Promptness in updation of accounts V.Low Low Average
High V. High
Before e-service
After e-service
3 Supervision and control over business accounts/ Inventory
V.Low Low Average
High V. High
Impact assessment of tax automation of CTD, Kerala I Page 83 of 105
Before e-service
After e-service
4
Department's responsiveness to queries/problems
V.Low Low Average
High V. High
Before e-service
After e-service
5
Human effort required in filing of returns/ tax payment etc
V.Low Low Average
High V. High
Before e-service
After e-service
6
Volume of Paper works required V.Low Low Average
High V. High
Before e-service
After e-service
7
Financial cost of filing returns V.Low Low Average
High V. High
Before e-service
After e-service
8
Time spent for filing of returns V.Low Low Average
High V. High
Before e-service
After e-service
9
Frequency of occurrence of errors in filing returns/ tax payment
V.Low Low Average
High V. High
Before e-service
After e-service
10
User Friendliness of KVATIS V.Low Low Average
High V. High
Ease of Navigation
Look and feel
Help (online/offline)
Impact assessment of tax automation of CTD, Kerala I Page 84 of 105
Availability of relevant Information
11
Awareness / Familiarization programs, online services/ tutorials availed for e-filing
V.Low Low Average
High V. High
Audio-visual Media
Print Media
Online Services
Handouts/ Pamphlets
Helpdesk/Helpline
Departmental assistance
12
Factors that facilitated your switch to e-services
V.Low Low Average
High V. High
Computer Literacy
Availability of proficient manpower
Easiness of KVATIS System
Departmental assistance
Cost efficiency
13
Number of visits to CTD offices
(On an Annual Basis) In figure
Before e-service
After e-service
14 Overall rating of e-service of KVATIS
V.Low Low Average High V. High
15 Suggestions and Comments
Impact assessment of tax automation of CTD, Kerala I Page 85 of 105
3. Questionnaire for practitioners
Questionnaire: Practitioners
Name of the respondent: (optional)
District
Question No.
Question Tick the appropriate scale
1
Access to statutory forms V.Low Low Average High V. High
Before e-service
After e-service
2
Promptness in updation of accounts V.Low Low Average High V. High
Before e-service
After e-service
3
Supervision and control over business accounts/ Inventory
V.Low Low Average High V. High
Before e-service
After e-service
4
Department's responsiveness to queries/ problems
V.Low Low Average High V. High
Before e-service
After e-service
5
Human effort required in filing of returns/ tax payment etc
V.Low Low Average High V. High
Before e-service
After e-service
6 Volume of Paper works required V.Low Low Average High V. High
Before e-service
After e-service
7 Financial cost of filing returns V.Low Low Average High V. High
Before e-service
Impact assessment of tax automation of CTD, Kerala I Page 86 of 105
After e-service
8 Time spent for filing of returns V.Low Low Average High V. High
Before e-service
After e-service
9
Frequency of occurrence of errors in filing returns/ tax payment
V.Low Low Average High V. High
Before e-service
After e-service
10
User Friendliness of KVATIS V. Low Low Average High V. High
Ease of Navigation
Look and feel
Help (online/offline)
Availability of relevant Information
11
Awareness / Familiarization programs, online services/ tutorials availed for e-filing
V. Low Low Average High V. High
Audio-visual Media
Print Media
Online Services
Handouts/ Pamphlets
Helpdesk/Helpline
Departmental assistance
12
Percentage increase/decrease in number of clients after e-service
0 or Negative
Upto 25%
Upto
50%
Upto
75%
100% or
above
13
Number of visits to CTD offices (On an Annual Basis)
In figure
Before e-service
After e-service
Impact assessment of tax automation of CTD, Kerala I Page 87 of 105
14
Overall rating of KVATIS System V. Low Low Average High V. High
15 Suggestions and Comments
11.1.1
Impact assessment of tax automation of CTD, Kerala I Page 88 of 105
4. Questionnaire for employees
Questionnaire-Employees
Name of the respondent:(optional) Division
(Tick the appropriate)
Assessment Wing
District
Intelligence Wing
Check Post
Question No.
Question Tick the appropriate scale
1
Number of discrepancies/offences detected per month
V. Low Low Average High V. High
Before e-governance
After e-governance
2
Improvement in efficiency of work V. Low Low Average High V. High
Before e-governance
After e-governance
3
Intra/inter departmental co-ordination/ exchange of information/data sharing
V. Low Low Average High V. High
Before e-governance
After e-governance
4
Work morale and self esteem V. Low Low Average High V. High
Before e-governance
After e-governance
5
Additional Revenue through scrutiny/verification
V. Low Low Average High V. High
Before e-governance
After e-governance
6
Office automation V. Low Low Average High V. High
Before e-governance
After e-governance
Impact assessment of tax automation of CTD, Kerala I Page 89 of 105
7
Report generation/ MIS V. Low Low Average High V. High
Before e-governance
After e-governance
8
Responsiveness of tax payers to queries/defects
V. Low Low Average High V. High
Before e-governance
After e-governance
9
Volume of Paper works required V. Low Low Average High V. High
Before e-governance
After e-governance
10
Time spent for scrutiny/verification V. Low Low Average High V. High
Before e-governance
After e-governance
11
Frequency of occurrence of errors in filing returns/ tax payment
V. Low Low Average High V. High
Before e-governance
After e-governance
12
Workload of Employees V. Low Low Average High V. High
Before e-governance
After e-governance
13
Number of Visits of tax payers to CTD offices V. Low Low Average High V. High
Before e-governance
After e-governance
14
Training availed for e-governance V. Low Low Average High V. High
Adequacy of Content
Relevance
Follow up
Frequency
Impact assessment of tax automation of CTD, Kerala I Page 90 of 105
15
User Friendliness of KVATIS V. Low Low Average High V. High
Ease of Navigation
Look and feel
Help (online/offline)
Availability of relevant Information
16
Number of files scrutinized/verified per month In figure
Before e-governance
After e-governance
17
Overall rating of KVATIS System
V. Low Low Average High V. High
18 Suggestions and Comments
Impact assessment of tax automation of CTD, Kerala I Page 91 of 105
5. Z-test Analysis of Dealers
95% 99%
Access to statutory forms
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.700787 3.571429 Mean 2.700787 3.571429
Known Variance 1.3 1.2 Known Variance 1.3 1.2
Observations 127 126 Observations 127 126
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -6.19363
z -6.19363
P(Z<=z) one-tail 2.94E-10
P(Z<=z) one-tail 2.94E-10
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 5.88E-10
P(Z<=z) two-tail 5.88E-10
z Critical two-tail 2.241403 z Critical two-tail 2.807034
Promptness in updation of accounts
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.726563 3.920635 Mean 2.726563 3.920635
Known Variance 1.1 0.9 Known Variance 1.1 0.9
Observations 128 126 Observations 128 126
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -9.51864
z -9.51864
P(Z<=z) one-tail 0
P(Z<=z) one-tail 0
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 0
P(Z<=z) two-tail 0 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Impact assessment of tax automation of CTD, Kerala I Page 92 of 105
Supervision and control over business accounts/
Inventory
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.76378 3.905512 Mean 2.76378 3.905512
Known Variance 1 0.8 Known Variance 1 0.8
Observations 127 127 Observations 127 127
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -9.59025
z -9.59025
P(Z<=z) one-tail 0
P(Z<=z) one-tail 0
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 0
P(Z<=z) two-tail 0 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Department's responsiveness to queries/problems
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.8125 3.428571 Mean 2.8125 3.428571
Known Variance 0.9 1.1 Known Variance 0.9 1.1
Observations 128 126 Observations 128 126
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -4.9072
z -4.9072
P(Z<=z) one-tail 4.62E-07
P(Z<=z) one-tail 4.62E-07
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 9.24E-07
P(Z<=z) two-tail 9.24E-07 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Human effort required in filing of returns/ tax
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Impact assessment of tax automation of CTD, Kerala I Page 93 of 105
payment etc
Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.390625 2.724409 Mean 3.390625 2.724409
Known Variance 1.1 1.5 Known Variance 1.1 1.5
Observations 128 127 Observations 128 127
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 4.663896
z 4.663896
P(Z<=z) one-tail 1.55E-06
P(Z<=z) one-tail 1.55E-06
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 3.1E-06
P(Z<=z) two-tail 3.1E-06 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Volume of Paper works required
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.574803 2.417323 Mean 3.574803 2.417323
Known Variance 1 1 Known Variance 1 1
Observations 127 127 Observations 127 127
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 9.2236
z 9.2236
P(Z<=z) one-tail 0
P(Z<=z) one-tail 0
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 0
P(Z<=z) two-tail 0 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Financial cost of filing returns
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Impact assessment of tax automation of CTD, Kerala I Page 94 of 105
Mean 3.054688 2.84127 Mean 3.054688 2.84127
Known Variance 0.9 1.3 Known Variance 0.9 1.3
Observations 128 126 Observations 128 126
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 1.620305
z 1.620305
P(Z<=z) one-tail 0.052583
P(Z<=z) one-tail 0.052583
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 0.105167
P(Z<=z) two-tail 0.105167 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Time spent for filing of returns
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.460938 2.425197 Mean 3.460938 2.425197
Known Variance 1 1 Known Variance 1 1
Observations 128 127 Observations 128 127
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 8.269662
z 8.269662
P(Z<=z) one-tail 1.11E-16
P(Z<=z) one-tail 1.11E-16
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 2.22E-16
P(Z<=z) two-tail 2.22E-16 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Frequency of occurrence of errors in filing returns/ tax
payment
95% 99%
z-Test: Two Sample for Means z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.054688 2.503937 Mean 3.054688 2.503937
Known Variance 0.8 1.2 Known Variance 0.8 1.2
Impact assessment of tax automation of CTD, Kerala I Page 95 of 105
Observations 128 127 Observations 128 127
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 4.395633
z 4.395633
P(Z<=z) one-tail 5.52E-06
P(Z<=z) one-tail 5.52E-06
z Critical one-tail 1.959964
z Critical one-tail 2.575829
P(Z<=z) two-tail 1.1E-05
P(Z<=z) two-tail 1.1E-05 z Critical two-tail 2.241403 z Critical two-tail 2.807034
6. Z-test analysis of Practitioners
Z(95%) Z(99%)
1.96 2.58
Respondents
District
Z Value Reject the null hypotheses ("There is no impact because of e-
Service")?
Access to statutory forms
Before e-service -11.61733532 After e-service
Yes Yes
Promptness in updation of accounts
Before e-service -12.89731741 After e-service
Yes Yes
Supervision and control over business accounts/ Inventory
Before e-service -14.00287709 After e-service
Yes Yes
Department's responsiveness to queries/ problems
Before e-service -1.072399748 After e-service
Yes Yes
Impact assessment of tax automation of CTD, Kerala I Page 96 of 105
Human effort required in filing of returns/ tax payment etc
Before e-service -0.141946358 After e-service
Yes Yes
Volume of Paper works required
Before e-service 0.560903071 After e-service
Yes Yes
Financial cost of filing returns
Before e-service -10.14814455 After e-service
Yes Yes
Time spent for filing of returns
Before e-service -2.460148141 After e-service
Yes Yes
Frequency of occurrence of errors in filing returns/ tax payment
Before e-service 1.505685713 After e-service
Yes Yes
Z-test analysis of Employees
Question 90% 95% 99%
Number of discrepancies
/offences detected per
month
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.45 3.532995 Mean 2.44898 3.532995 Mean 2.44898 3.532995
Known Variance 0.55 0.66 Known Variance 0.55 0.66 Known Variance 0.55 0.66
Impact assessment of tax automation of CTD, Kerala I Page 97 of 105
Observations 196.00 197 Observations 196 197 Observations 196 197
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -13.82 z -13.8157 z -13.8157
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Improvement in efficiency
of work
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.81 3.868687 Mean 2.811224 3.868687 Variable 1 Variable 2
Known Variance 0.47 0.38 Known Variance 0.47 0.38 Mean 2.811224 3.868687
Observations 196.00 198 Observations 196 198 Known Variance 0.47 0.38
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0 Observations 196 198
z -16.09 z -16.09409
Hypothesized Mean Difference 0
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 z -16.09409
Impact assessment of tax automation of CTD, Kerala I Page 98 of 105
z Critical one-tail 1.64 z Critical one-tail 1.959964 P(Z<=z) one-tail 0
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 z Critical one-tail 2.575829
z Critical two-tail 1.96 z Critical two-tail 2.241403 P(Z<=z) two-tail 0
z Critical two-tail 2.807034
Intra/inter departmental co-ordination/ exchange of information/data sharing
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.21 3.718593 Mean 2.212121 3.718593 Mean 2.212121 3.718593
Known Variance 0.71 0.66 Known Variance 0.71 0.66 Known Variance 0.71 0.66
Observations 198.00 199 Observations 198 199 Observations 198 199
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -18.13 z -18.13258 z -18.13258
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Work morale and self esteem
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Impact assessment of tax automation of CTD, Kerala I Page 99 of 105
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.83 3.747475 Mean 2.831633 3.747475 Mean 2.831633 3.747475
Known Variance 0.57 0.58 Known Variance 0.57 0.58 Known Variance 0.57 0.58
Observations 196.00 198 Observations 196 198 Observations 196 198
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -11.99 z -11.98695 z -11.98695
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Additional Revenue through
scrutiny/verification
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.67 3.785714 Mean 2.668367 3.785714 Mean 2.668367 3.785714
Known Variance 0.56 0.46 Known Variance 0.56 0.46 Known Variance 0.56 0.46
Observations 196.00 196 Observations 196 196 Observations 196 196
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -15.49 z -15.48874 z -15.48874
Impact assessment of tax automation of CTD, Kerala I Page 100 of 105
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Office automation
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.33 3.605 Mean 2.329949 3.605 Mean 2.329949 3.605
Known Variance 0.65 0.66 Known Variance 0.65 0.66 Known Variance 0.65 0.66
Observations 197.00 200 Observations 197 200 Observations 197 200
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z -15.70 z -15.69539 z -15.69539
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Impact assessment of tax automation of CTD, Kerala I Page 101 of 105
Report generation/
MIS
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.22 3.919598 Mean 2.22 3.92 Mean 2.22 3.92
Known Variance 0.91 0.54 Known Variance 0.91 0.54 Known Variance 0.91 0.54
Observations 197.00 199 Observations 197.00 199.00 Observations 197.00 199.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
z -19.81 z -19.81 z -19.81
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00
z Critical one-tail 1.64 z Critical one-tail 1.96 z Critical one-tail 2.58
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00
z Critical two-tail 1.96 z Critical two-tail 2.24 z Critical two-tail 2.81
Responsiveness of tax payers to queries/defects
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 2.64 3.707071 Mean 2.635897 3.707071 Mean 2.635897 3.707071
Known Variance 0.66 0.69 Known Variance 0.66 0.69 Known Variance 0.66 0.69
Observations 195.00 198 Observations 195 198 Observations 195.00 198.00
Impact assessment of tax automation of CTD, Kerala I Page 102 of 105
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0.00
z -12.92 z -12.92404 z -12.92
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0.00
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.58
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0.00
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.81
Volume of Paper works
required
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.7 2.7 Mean 3.75 2.68 Mean 3.747475 2.683417
Known Variance 0.8 0.9 Known Variance 0.80 0.90 Known Variance 0.8 0.9
Observations 198.0 199.0 Observations 198.00 199.00 Observations 198 199
Hypothesized Mean Difference 0.0
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
z 11.5 z 11.50 z 11.50
P(Z<=z) one-tail 0.0 P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00
z Critical one-tail 1.6 z Critical one-tail 1.96 z Critical one-tail 2.58
P(Z<=z) two-tail 0.0 P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00
Impact assessment of tax automation of CTD, Kerala I Page 103 of 105
z Critical two-tail 2.0 z Critical two-tail 2.24 z Critical two-tail 2.81
Time spent for
scrutiny/verification
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.51 2.852792 Mean 3.51 2.85 Mean 3.51 2.85
Known Variance 0.98 1.19 Known Variance 0.98 1.19 Known Variance 0.98 1.19
Observations 196.00 197 Observations 196.00 197.00 Observations 196.00 197.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
z 6.26 z 6.26 z 6.26
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00
z Critical one-tail 1.64 z Critical one-tail 1.96 z Critical one-tail 2.58
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00
z Critical two-tail 1.96 z Critical two-tail 2.24 z Critical two-tail 2.81
Frequency of occurrence of errors in filing returns/ tax
payment
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.54 2.299492 Mean 3.540816 2.299492 Mean 3.540816 2.299492
Known Variance 0.77 0.65 Known Variance 0.77 0.65 Known Variance 0.77 0.65
Impact assessment of tax automation of CTD, Kerala I Page 104 of 105
Observations 196.00 197 Observations 196 197 Observations 196 197
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0
Hypothesized Mean Difference 0
z 14.60 z 14.60072 z 14.60072
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0 P(Z<=z) one-tail 0
z Critical one-tail 1.64 z Critical one-tail 1.959964 z Critical one-tail 2.575829
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0 P(Z<=z) two-tail 0
z Critical two-tail 1.96 z Critical two-tail 2.241403 z Critical two-tail 2.807034
Workload of Employees
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.89 3.474747 Mean 3.89 3.47 Mean 3.89 3.47
Known Variance 0.72 1.13 Known Variance 0.72 1.13 Known Variance 0.72 1.13
Observations 197.00 198 Observations 197.00 198.00 Observations 197.00 198.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
z 4.33 z 4.33 z 4.33
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00
z Critical one-tail 1.64 z Critical one-tail 1.96 z Critical one-tail 2.58
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00
Impact assessment of tax automation of CTD, Kerala I Page 105 of 105
z Critical two-tail 1.96 z Critical two-tail 2.24 z Critical two-tail 2.81
Number of Visits of tax payers to
CTD offices
z-Test: Two Sample for Means
z-Test: Two Sample for Means
z-Test: Two Sample for Means
Variable 1 Variable 2 Variable 1 Variable 2 Variable 1 Variable 2
Mean 3.75 2.37 Mean 3.75 2.37 Mean 3.75 2.37
Known Variance 0.67 0.79 Known Variance 0.67 0.79 Known Variance 0.67 0.79
Observations 195.00 196 Observations 195.00 196.00 Observations 195.00 196.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
Hypothesized Mean Difference 0.00
z 15.99 z 15.99 z 15.99
P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00 P(Z<=z) one-tail 0.00
z Critical one-tail 1.64 z Critical one-tail 1.96 z Critical one-tail 2.58
P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00 P(Z<=z) two-tail 0.00
z Critical two-tail 1.96 z Critical two-tail 2.24 z Critical two-tail 2.81