TCS Transformers - March 2012

AN IDG CUSTOM SOLUTIONS INITIATIVE IN ASSOCIATION WITH

TRANSFORMING BUSINESS THROUGH JUDICIOUS APPLICATION OF IT

PLUS

The monsters of the heavy tax forms and headaches about duplicate data entry are things of the past. Gujarat Commercial Tax Department’s IT implementation for VAT makes the system efficient and transparent.

INTERVIEW PR Krishnan, Senior VP and Global Head IT (IS), TCS, talks about how Indian enterprises have the opportunity to leapfrog to the newest technology.

TRANSFORMERS CASE STUDY

TAXING TIMES NO MORE Customer Gujarat Commercial Tax Department, Government of Gujarat Industry Government Offering Revenue and Taxation Solutions

The monsters of the heavy tax forms and headaches about duplicate data entry are things of the past. Gujarat Commercial Tax

Department’s IT implementation for VAT makes the system efficient and transparent.

CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES

I

t is the bread and butter for Indian States and Union Territories: tax collection. Commercial taxes form the most important revenue base, often accounting for 60-70 percent of total internal resources generated. When the Government of Gujarat adopted VAT on 1st April 2006, it was keen to get its act right from day one.

Realizing that an efficient tax collection system was imperative to the smooth functioning of the state, the government decided to automate the entire VAT-related business processes at the time of adoption of the VAT Act itself. Besides, it would further help boost the image of Gujarat as an attractive business destination.

During an open bid, TCS qualified as software vendor based on its proven track record of delivering IT solution based on best international practices to meet the administration’s demanding service delivery needs.

THE TAX STRUCTURE The Commissionerate of Commercial Tax is the nodal agency for the administration and collection of various taxes in the State of Gujarat. It functions under the Finance Department of the Government of Gujarat, and is responsible for the administration of certain tax acts such as the Central Sales Tax Act, the Value Added Tax, the Profession Tax, the Motor Spirit CESS Act and many others.

The Value Added Tax (VAT) was introduced in the Indian Tax system from April 1, 2005, and the Government of Gujarat adopted VAT a year later.

The Government decided to automate the VAT-related business processes at the same time. To digitize the entire project, the Gujarat Commissionerate of Commercial Taxes asked TCS to develop and implement a VAT Information System (VATIS) that was efficient and cost-effective.

One of the most significant government-tobusiness (G2B) e-governance initiatives by the state government, the VATIS project was aimed at Due revenue Collection, efficiency in tax administration, transparency in operation, widening of the tax net, cost-effectiveness, controlling tax evasion and ensuring higher compliance levels. For citizens, the s ystem had to provide reduction in touch points, location independence, 24x7 availability, data reliability, quick remittance of refund and e-communication with the department for queries.

Process re-engineering and an efficient IT application enabled tax administration has brought down cost of compliance and cost of collection“ HARIBHAI PATEL (IAS) Commissioner of Commercial Tax Govt. of Gujarat.

Document Management System and performance reports were required to help improve process efficiency and service delivery. The VATIS project was designed to bring in increased accountability, as well.

THE SPADEWORK To chart out a path for the deployment of the new system, the project team studied the gap between the defined objectives and the current state of business processes within various departments.

The best practices adopted in other states and countries were also studied.

“Process re-engineering and an efficient IT application enabled tax administration has brought down cost of compliance and cost of collection,” said Haribhai Patel (IAS), Commissioner of Commercial Tax - Govt. of Gujarat.

TCS carried out Gap Analysis to determine the changes to be made to the current processes and functions in order to achieve the tax department’s goal of improving citizen services and the department’s internal efficiency. The GAP Analysis was done keeping in mind three states: “AS-IS” state that defines the current processes and performance levels “TO-BE” state that defines a feasible and practical situation derived by applying conditions local to Government to the “CAN BE” state; local conditions including availability of resources and growth plans

Document Management System and performance reports were required to help

improve process efficiency and service delivery.

TRANSFORMERS CASE STUDY and the “CAN-BE” state that defines a near-ideal situation which is derived using benchmark analysis and environment analysis by applying best practices.

FOCUS ON OPEN SOURCE

center was built with skills on Struts and Java.

TCS provided the Gujarat government with an integrated tax administration system for VAT, along with the automation of business p ro ce s s e s a n d a w e b portal for the Commercial Tax department that offered eServices to the taxpayers. The system is highly configurable. Other features included development of a hybrid model (both decentralized and centralized), a robust, secure, scalable and maintainable n-tier architecture, 24x7 availability through portal, real-time integration with banks’ net banking system, integration with Tax Information Exchange System (a centralized exchange of all interstate dealers spread across states and UTs) and integration with the IFMS (Integrated Financial Management System) of the finance department.

VATIS was built with a vision “to improve the prospects of sustained economic development by reducing fiscal deficit through buoyant tax revenue”.

It is a generalized solution for revenue / taxation authorities to serve all tax administration needs of Commercial Tax Department in the Government of Gujarat, while addressing the customer service requirements of taxpayers. The system can be upgraded and helps supports the tax and revenue management life cycle at lower risk and cost.

The major components of VATIS are multi tax support, Web based interface, e-services,

KEY HIGHLIGHTS VATIS supports administrators in decision making.

It has helped divert manpower from manual issuance of forms to more intelligent work of Return Scrutiny.

Registration Certificate and CST Forms are issued under Digitally Signed Certificate but no dealer or officer is required to procure Digital Certificate. Signer Code is being used to sign the document Crosscheck of Input Tax Credit for refund and assessment to be done instantly through electronic invoice matching Internal Controls and audits have been strengthened.

automation and reengineering of business processes, audit trails, multilingual support and dealer integrated view.

The major business processes covered in VATIS (Application for Departmental Users) are registration, returns, payments, scrutiny and assessment, refund, recovery, appeal and revision, penalty, enforcement, checkpost (GISGoods Information System), MIS and management dashboard, system key value-adds and features and statutory forms control system (SFCS).

The eServices on the web portal include eRegistration, eReturns, ePayments, Online Issuance of Digitally Signed CST (Central Sales Tax) Forms and ewaybills, eAmendment, eNotices and eRefund.

TCS implemented the project in an onsite/ offsite mode, with resources stationed both onsite at the client’s office and at the TCS development centre in Ahmedabad. The expertise and services of the Performance Engineering Group and Performance Engineering Labs were utilized to improve the performance of the system in the production environment.

A Framework Oriented Approach was adopted, and TCS customized and improvised the TCS Taxation Framework to cater to the requirements of the Gujarat Government. The web technology center was built with skills on Struts and Java. The VATIS framework was developed on open standards − Java/J2EE technologies using MVC concepts which provided scalability, maintainability, modularity, reusability, portability, performance, security and industry-wide support.

The framework also provided web-based access and SOA support.

The open source technologies used are: Barbecue for generating barcodes, C3P0 for connection pooling, Cewolf for generating Charts, JXL for reading Excel files, Digester for parsing XML files, iText for writing PDF files, JasperReports for generating Notices, Log4J for logging purpose, PramukhLib - Javascript library for multilingual writing, and jQuery - Javascript framework for GUI. The TCS team followed the TCS Quality process and managed the project flawlessly to ensure ontime delivery of the solution. A well-established methodology for transaction volume analysis was used to calculate a broad estimate of the hardware specifications that were needed to support the

The VATIS framework was developed on open standards. The web technology

CUSTOM SOLUTIONS GROUP TATA CONSULTANCY SERVICES

PATH BREAKING APPLICATIONS TRACE: Time honored Registration and Amendment done Centrally & Electronically

OASIS: Online Application and Scrutiny of Inter-State transactions

New registrations, amendments, cancellation are done through the system Process re-engineering Dealer not required to visit VAT office for Provisional Registration Number (PRN) and RC. He can download and print from website.

PRN and RC bear bar code, department’s logo, water mark, seal and digital signature. However, no dealer is required to obtain digital signature Not possible to tamper, forge or duplicate documents

enterprise system in the production environment for at least three years.

The data migration activity was also carried out using a time-tested approach; security testing, stress testing and performance testing were performed on the application as per standard processes so as to ensure the security and robustness of the solution in the production environment.

BENEFITS Perhaps the greatest beneficiary of the VATIS is the common man. Citizens are happy on account of the simple and easy tax compliance processes, the availability of multiple channels to access and use the eServices, better availability of the services via the 24x7 web portal and an improvement in the communication channels by the inclusion of new mediums such as web portal, emails and SMS. The portal has also provided improved transparency and helped disseminate information using features such as ‘Track My Status’ which provides the status of any requests of a tax payer.

The system also effected a reduction in the turnaround time through reduction of tax touch points and improved process administration.

A greater number of online procedures have

Forms C, F and H under CST No separate application No human intervention Details of purchases and procurements to be given in e-CST return Forms can be downloaded and printed from web site Forms bear seal, logo, bar code, water mark and digital signature No dealer is required to obtain digital signature Misuse of forms controlled.

Saves time and resources Inter-State cross checks have become easy for tax administrators of other States also.

helped reduce the amount of time for physical filing of forms.

With VATIS, the authorities have better control on tax evasions. The system’s computing and analytic capability has also helped widen the tax net. It has provided for efficient tax administration through automation of the business processes, and reduced the time the staff spent on activities that did not add any value to the process. Manual errors are also reduced.

The system has also enabled better decision making through creation of over 200 types of MIS reports and near real-time and accurate information availability.

Automation has played a significant role in increasing efficiency. Some of the processes that have been automated include pre-formatted document printing and generation of exception reports. A tax calculator is also available.

Operating costs were lowered due to use of open source technologies, high level of automation for routine operational activities and use of the onsite/offsite model by TCS, by optimizing resource utilization.

TCS’ rigor in implementing the VATIS system helped Gujarat lead and excel in the automation of the tax administration process in the country.

TRANSFORMERS INTERVIEW

TAKING The QUANTUM LEAP PR Krishnan talks about

how Indian enterprises have the opportunity to leapfrog over successive generations of technology to the most recent version, making them a force to reckon with.

PR Krishnan,

Senior VP and Global Head IT (IS), TCS

Custom Solutions Group TATA CONSULTANCY SERVICES

What are the latest technologies in ITIS? Is India coming of age in the ‘hosted solutions’ and ‘business process management services’ space?

Virtualization has been the basis for technological evolution over the past few years. It laid the foundation for the development of the infrastructure space. BYOD, mobility solutions, social media, analytics and big data comes next.

These have caught the imagination of CIOs today. The advantage that Indian organizations have is that they can skip legacy, which many of the Western countries cannot. In India, many initiatives are green field operations which enable them to start with the latest technology since many delivery models such as SaaS and IaaS are evolving. Indian companies can probably make quantum leaps in the way they deliver services to their customers because they are quick in adopting the latest technologies. The Indian market was traditionally focused on “tower-based engagements and SI engagements”.

Today, we have the opportunity of taking up a cloud service or creating a transformation model, which will enable “Anything As A Service”. By creating innovative delivery models, it would enable them to pay based on transactions or business processes. That is the advantage the Indian market has today and if customers can leverage it, they will experience its benefits.

What are the major verticals in this space? What are the reasons for these verticals to opt for ITIS (endto-end) rather than stand-alone solutions?

The verticals where we see maximum traction for IT IS in India are BFS, Telecom and Government, followed

by Retail. The BFS sector finds it important to adopt infrastructure management services to serve their customers on an integrated platform and provide different solutions within their portfolio. It helps them to increase operational efficiency and streamline processes. At the same time, they can also provide new solutions to their customers because their go-to-market strategy is enhanced as a result of their unified platform.

The telecom sector on the other hand, witnessed a very rapid growth and it was not able to implement proper processes and disciplines. Today, they have to not only reduce their IT infrastructure footprint but also improve their delivery and services. This can be achieved by having a single point of ownership for end-to-end infrastructure management, SLA-based accountability, and a standard operating environment in the IT infrastructure space.

Outdated IT infrastructure is making it difficult to exploit new technologies such as cloud computing and virtualization. How can enterprises overcome these challenges?

Outdated IT infrastructure definitely hinders the adoption of new technology. However, an important aspect of cloud computing is that it forces standardization. The primary reason for cloud computing to become a viable and alternative delivery model is virtualization. It gives a certain amount of flexibility to customers as they can use CPU or storage, based on the usage. Another reason is that it is an opex-based model

and customers need to pay only for what they have consumed.

These aspects make cloud computing attractive and enterprises believe that this platform will give them agility and adaptability. But applications that have a constant utilization during their lifecycle cannot benefit from cloud computing.

This technology can be useful only for those applications that have peaks and valleys of consumption. Organizations have to decide where to exploit this technology and where not to. That is what is our advise to our customers.

How can enterprises identify the right pricing models for different types of infrastructure services?

Pricing models, especially in infrastructure outsourcing contracts, are crucial in making outsourcing progressive, agile, and flexible. In large infrastructure deals, the pricing was based on the number of CPUs, servers and the terabytes of storage consumed. The pricing model in the infrastructure space is more mature than the end-to-end outsourcing or process or application-based pricing.

With cloud computing, cloud providers are likely to have a variety of pricing plans based on a number of variables typically driven by how the services are consumed. Cloud providers also will have to track in detail the actual consumption by customers, which historically was not a concern for traditional hardware and software vendors. This becomes increasingly complex, when there are back-toback contracts with product vendors, hosting providers and warranty support bundled into one transaction price.

How do you differentiate between innovation and continuous improvement for providing business value, as opposed to providing technical value?

The fundamental premise for continuous improvement is based on the fact that there are inefficiencies in the existing model and they can be improved. Based on our experience, we focus our efforts on removing the operational inefficiencies, which are an inherent part of all organizations.

Given that we have a mature model of solving these problems, we provide continuous improvement. Continuous improvement is a part of our contractual commitments to our customers.

In the case of innovation, we encourage quantum jumps in what customers can achieve with their IT budget. It can be TCO reduction or solutions that decrease go-to market timelines.

Most innovative efforts are focused on making technology operations more efficient and effective and are transformational in nature. With innovation, we take a proactive approach and reach out to the customer with new delivery models, which may not have been used elsewhere.

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