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.
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 tax revenue of a state.” As these taxes are contributing heavily to the total tax revenue, state departments pay more attention to these taxes.
Detailing on the tax system, 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 was important.”
Speaking on digitalisation, he mentioned, “Since the onset of GST, every tax processing was shited to online modes. 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 type 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.
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, he concluded.