sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Direct Tax »
 Direct tax collection exceeds target in FY18
 Taking the 1st five steps to saving taxes Income Tax
 TDS on interest income: Want to avoid? Here’s how you can do this
 CBDT to modify advance ruling forms for transparency in cross-border deals
 New ITR forms for 2018-19 notified by CBDT
 Income Tax Return form: There are many changes you need to know
 Procedure For Registration And Submission Of Statement Of Financial Transactions (Sft) As Per Section 285ba Of Income-Tax Act, 1961 Read With Rule 114e Of Income-Tax Rules, 1962
 Income tax return forms for FY 2017-18 released
 10 benefits of filing ITR even if you are below taxable bracket
 How to file Income Tax Returns online in five simple steps
 Income tax returns (ITR) deadline over; how belated returns filing will impact you

Tax reforms: The Modernisation of direct tax systems
February, 13th 2014

One of the most significant moments in the history of direct tax modernisation relates to the landmark recommendations made by the task force under the leadership of Vijay Kelkar during the early years of the last decade. Keeping in mind the fundamental principles of efficiency, equity and effectiveness, the task force focused on four operational objectives, including institution of a simple and transparent system, reduction of transactions costs of tax revenue collection and compliance costs of taxpayers, alignment of incentives of taxpayers and the tax administration; and widening of the tax base.

The recommendations generated a wave in the modernisation efforts of government processes and procedures. Since then, the Department of Direct Taxes has initiated several modernisation exercises. Some noted ones are: Permanent Account Number (PAN) application receipt and processing, electronic filing of tax deducted at source, development of all-India network for e-delivery of taxpayer services, e-filing of income tax returns and a centralised processing centre (CPC) at Bangalore.

For successful implementation of most of these programmes, government procurement system and procedures have been considered a basic hurdle to achieve the objectives. To overcome challenges, several models have been tested in the past to simplify procedures. Out of many innovative models, a transaction based approach is seen to be one of the preferred ones being used in e-governance projects. Transaction based model is typically used in a situation where output can be defined, transaction volumes are known and predictable and transaction volumes are tied to service provider's cost drivers. In transaction based pricing, what and how many resources are involved and how much time is taken to process the transaction while meeting the quality and service level agreement (SLA) requirements are variables typically managed by the service provider.

While the model has definite advantages of reduced technology risk and efficiency improvements, it presents unique challenges if not exercised properly. In most cases, it has been observed that officers concentrate only on the output and generally don't involve in the internal process changes and technology investments by service provider from time to time to meet SLAs. Even though there is a provision of periodic work audit in the contract, it is hardly exercised in practice.

Such an approach of monitoring simply favours service providers. As a matter of strategy, they will have a tendency to carry out intrinsic changes in the system to make the exercise of the "exit" clause difficult and unviable and create a situation wherein extension of contract becomes the only option due to fear of financial loss, possible disruption, delay or discontinuity of services to citizens.

Even in the case of a Build Own Operate and Transfer (BOOT) model, a similar situation is likely to occur. As a result, at the end of the contract period, the government may face either a "no bid" or "single bid" situation and find it extremely difficult to manage challenges posed by the prime bidder and its consortium partners or other interested group of technology and service companies, creating a situation of near-cartelisation.

Given the pace of modernisation, it is time the government takes cognisance of these facts and aggressively institutes a strict audit mechanism to safeguard its interest. It may be a good idea to introduce a system of having a mandatory panel of experts (technology and process) to assist officers in carrying regular internal audits including technology audit.

Since some large transaction based e-governance programmes are leading to the end of a contract period in less than a year or so and many more projects are yet to start following similar models, immediate action and necessary measures by the government would be most desirable to incorporate lessons and take meaningful control of various mission-mode programmes to realise its vision of effective and efficient delivery of services to citizens.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multi-level Marketing MLM India Affiliate Marketing Affiliate Marketing Software MLM Software MLM Solutions Multi level marketing solutions MLM Servi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions