Since the onset of the COVID pandemic, governments, private firms, educational institutes, and others have taken the digital route to ensure business continuity. However, with this, the government has evolved and so its revenue generation methods and management. Sharing his vantage point on this, Arvind Mishra, Additional Commissioner, GST, Government of Rajasthan, addressed the Revenue Management & Intelligence Summit 2021 on May 5, 2021.
While answering how the state of Rajasthan is leveraging technology for effective management of revenue and how is the GST department creating a future-ready infrastructure, he began by raising a concern that ‘why do we need technology in the first place in tax systems?’ Highlighting the significance of taxes, he said, “Tax revenue has a major contribution to the total revenue generated by a state. Within taxes, Value Added Tax (VAT) and Goods and Services Tax (GST) alone make up to almost 63 per cent of the total state tax revenue of a state.” As these taxes are contributing heavily to the total tax revenue, state departments pay more attention to these taxes and improve the management of these taxes.
Detailing on the history of the tax system and how it evolved with time, Arvind Mishra said, “Earlier, the taxes were imposed on a particular stage of taxable payment processing. Afterwards, as the economy grew, taxes were being imposed on every successive event in the payment process. It is called multiple-event taxation. With this system, the overall taxation increases substantially. Dealing with this huge data of people’s accounts, who all have to be verified, which transactions should be verified, etc. became a challenge as all of this data has to be selected on the basis of some information. Therefore, to fetch the information data analysis posed an essential tool.”
Elaborating on the role of data analytics, he said, “After the implementation of data analytics, who is to be checked was decided by the officials and what is to be checked was decided by the system. Who is to be checked is decided on the basis of transactions being done by the person.”
Speaking on digitalisation, he mentioned, “Since the onset of GST, every tax processing was shited to online modes. When a person wants a GST number he applies online. When he starts a business, he pays his taxes online, files for the refund online and gets his returns online. Also, in case of any query, the person can raise the same online. So, to manage the tax there are three aspects – ensure proper reporting, verifying reported transactions and identifying underreported and unreported transactions.”
Firstly, the data of transactions have to be reported. With these submissions, there is a certain set of data that gets available to the department. Next, the verification is done. Whether the report submitted is authentic or not, the data is correct or not, if the data submitted is contradictory to each other, etc. such types of verifications are done by analysing the data available. There is a specific area on the GST portal wherein the verifications can be done, he added.
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Further, he said that to make the system more transparent, alert and investigation should not be subjective but objective. It should not be driven by a person but the system which can detect anomalies and raise a red flag. “This is important as we cannot check each and every transaction. Also, there was a need to make the system transparent,” said Arvind Mishra.
Regarding transparency of the system, he said, “Looking for data of underreported and unreported transactions is a major challenge as the department doesn’t have the data. Therefore, to fetch such data we need to analyse the data from other departments such as electricity, IT, etc.” To improve the overall revenue scenario in the state. The Chief Minister had released a declaration that includes the establishment of a Centre of Excellence for Revenue Data Management, For this, a technical spot unit is being established in Rajasthan. This will consist of several experts from the IT domain having expertise in data analytics and on the basis of reports submitted by the unit, the department will take the needful action, he concluded.