CIOIN

Executive summary

Rs 6.25 crore. The amount recovered from an iron-ore exporter in Bangalore. What's interesting is that the tip off came from the department's Tax Information Network. This is only one instance of the phenomenal change brought about by replacing a 55-year-old manual system, with the Tax Information Network, a repository of tax payer information, and allied technology implementations.

The Tax Information Network was launched on July 22, 2005. Before the network came on, members of the IT department depended only on market intelligence, random scrutiny and on 'search and seizure' to determine tax evasion. It was difficult to manually match and tie in high value transactions. The sheer number of documents that the IT department was inundated with, made reconciliation almost impossible as well as arbitrary.

The way the system works is simplicity itself. Under the provisions of AIR (Annual Information Return), agencies like banks and investment funds are required to file a report on transactions above a specified threshold. Then the department uses an intelligent and identity-blind system in tandem with data-mining and AI tools to identify tax evaders. In effect, the tax department can track spending patterns, making compliance the only choice.

Laying out and organizing tax filings also enabled the department to pick out information and complete the jigsaw puzzle business entities create. Policing tax payers better is what's prodding the department to consolidate information from all of its 36 regional computing centers to create a single data repository in New Delhi.

While most government agencies struggle with getting buy-in from users, members of the IT department welcomed the computerization. However, it wasn't a breeze. As with most e-governance projects, the biggest problems were faced at the grassroots level. The department is now pursuing a business process reengineering (BPR) exercise, which is expected to improve intelligence gathering and decision-making capabilities.

Apart from tracking evaders, there's another reason why BPR is being driven with such urgency: an increasing number of assesees. Meanwhile, creating fire-tracks to trap evaders was only part of the battle. There was an immediate need to hose down other fronts that are increasingly open to attack. An ever-growing amount of tax information being unloaded on the system is creating vast fields of data that could go up in flames - leaving the department without a back-up plan. A business continuity site that's being set up in Mumbai and a cold disaster recovery site in Chennai will fix this and allow the department to focus its energies into monitoring almost all tax-related matters on a continuous basis.

With among the highest instances of citizen interaction, the department requires tremendous co-operation from the government - and the department is getting it. Mathur says, "the government is open-handedly and open-heartedly supporting the department." He isn't being euphemistic; the government is paying for IT in the IT department - Rs 1,000 crore of it.

With so much support, the department feels obliged to pro-actively implement the network plan, but it can't do it all. This is why it decided to outsource some of its work to organizations like National Securities Depository Ltd (NSDL), which has been entrusted with the management of the network and three key sub-systems: Electronic Return Acceptance and Consolidation System (ERACS), Online Tax Accounting System (OLTAS) and Central PAN Ledger Generation System (CPLGS).

With NSDL acting as a clearinghouse for information, the department is free to roll ahead with its BPR project. The results of the re-engineering will go live on June 30, 2006. Part of this rollout will include a new three-tiered architecture, something that is critical to establish the single centralized database in Delhi. Mathur affirms that "everything is totally in place."

It's hard to find fault with his confidence considering that the department won the Golden Icon at the Ninth National Conference on e-governance in 2006. Mathur completely dismisses any chance of failure.