The Economic Intelligence Unit in Maharashtra uses advanced digital technologies to store and interpret data collected by the state’s sales tax department

n Maharashtra the computerisation of sales tax department was done quite early; in fact, Maharashtra is one of the first states in India to start computerisation of sales tax. We realised that the concept of physically monitoring the dealers. Today Maharashtra boasts of a state of the art tax management and intelligence system.

Economic intelligence unit for sales tax data analytics

The value added tax system was introduced in Maharashtra and many other states in 2005. For the effective implementation of VAT System, the geography based division structure was re-organised into function-based organisation. The major change being that of adoption of trust based compliance.

The use of electronic systems was made mandatory, and the state took recourse to solutions like as e-return, a statutory audit report in the form of e-704. As a result, huge electronic data started accumulating at the sales tax department.

Thus it became necessary to invest in storage and usage of this data, and the ‘Economic Intelligence Unit’ was born. Maharashtra is the first state in India to successfully implement such projects.

The divisions of Economic Intelligence Unit

The Economic Intelligence Unit (EIU) in Maharashtra has four divisions. These include:

• e-704 data analysis and integration unit – It is mandatory to upload certified audit report (e-704) for the registered dealer whose annual turnover is more than 60 lakhs. The detailed evaluation and analysis of this report is done and each transaction is verified and in case of any discrepancy the case is taken for investigation and business audit.

• 360 degree analysis unit – As per the pilot project of central government, the revenue related information from various revenue departments such as income tax, central excise, customs, and service tax is shared with MSTD and analyzed by this division. It also identifies importers, suspicious dealers etc.

• TINXSYS and Registration data analysis unit: Tax Information Exchange System (TINXSYS) is a centralized solution to facilitate information between State Commercial Tax Departments of India. This data analysis unit analyses declaration details under CST Act. The verification of interstate purchases, branch transfer, entry tax dealers is performed in this unit

• BIDW and Cyber Forensic Unit: EIU is currently implementing two key projects namely business intelligence & data warehousing (BIDW) and Cyber Forensics Lab. For the first time in India, latest technology is being used in the commercial tax of any state government.

The entire information that is received from various departments of MSTD and outside revenue departments such as Income Tax, Service Tax, Central Excise etc will be extracted transformed and loaded. The analysis of this information will be fast, accurate and is geared to provide business intelligence to MSTD.

It will also strengthen investigation and will result in capture of frauds and tax evasion cases. The Cyber Forensic Lab has forensic tools such as Encase and FTK. In Addition, through the usage of e-discovery tools a series of digital evidences get created. These digital evidences are admissible under IT Act.

In addition to the above the EIU also has Data Management and Monitoring Unit, Commodity Analysis Unit and a Dealer Profiling Unit.

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