Excise: not yet .IN

The government departments have taken steps towards pushing

the thousands of component exporters and importers in the automobile, oil,

manufacturing, and construction sectors, among others, to file their import

returns online. But are the assessees voting with their keyboards? Hardly, says

V Sridhar, director general-Systems and Data Management, Directorate-General of

Systems and Data Management (DGSDM). The man who could be termed the CIO of

India's formidable excise department, feels that the verdict is clear:

e-filing of returns is yet to take off.

India's average connectivity speeds languish in the region

of 64 kbps and broadband connectivity, though cheaper by at least 40% in comparison with

over a year ago, is struggling to make inroads into an approximately 15 mn

Internet user base.

The government of India's excise and service tax portal has been slow on the uptake as far as assesees are concerned.

Laments Sridhar, who as customs commissioner of Navasheva

port was instrumental in consolidating hardware and aggregating data across 33

collection stations, "E-filing is still hobbling along without too many

takers. The problem primarily lies in the mindset." Last year, DGSDM saw an

intake of over 1.50 lakhs customs and excise tax assesees, and only 30,000 of

them opted for the e-filing option. Of these, a mere 688 opted to file company

or individual returns from the comfort of their offices. Sridhar's job will be

to see that every assessee does it.

S Balakrishnan, chairman, Indirect Taxes Committee,

Bangalore, Chamber of Commerce and Industry (BCIC) says that if major ERP

developers come up with stronger localization efforts a lot of implementation

problems could be tackled. "Software should be localized along with

e-filing applications online. Major companies should realize that legacy systems

need a lot of tweaking and online databases will have to be consolidated with

the rest of the ERP set-up. Our current data requirements require stronger ERP

apps support," says Balakrishnan. He adds, "On the other hand,

e-filing should pick up once broadband connectivity becomes ubiquitous. Right

now, we have been aiming to cut down the interface between government

departments and assesees to nil."

Glitch Combos



While ATM machine prototypes to collect electricity and water
bills have been in vogue for sometime now in the metros, online tax filing does

not enjoy the same real-time convenience. The automation of central excise and

service tax via e-filing interfaces has still not attracted mass assessee

appeal, bogged down as it is by a combination of ISP malfunctions, browser

incompatibilities, slow download times, Javascript and CGI errors and lack of

prompt communication channels. Users complain that response times from

government departments take weeks or are mostly ignored.

Ranging from the inability to add annexures, to coping with

ERP systems to attaching PDF files along with their returns, assesees opting for

Web filing have faced a host of problems. Take for instance, the larger

organizations, where an 'SAP dump' exercise-scouring hundreds of

applications across a large ERP set-up to produce annexures for every single

transaction the company has made during the filing period-becomes mandatory at

the time of filing their returns. Says an employee with an MNC database giant,

"ERP systems when conjoined with analytics software can produce plenty of

annexures. Most of these annexures pertain to service taxes, like the service

tax paid to different ISPs by any organization. There is no provision in the

e-filing system to attach these annexures even as PDF files, along with details

of our returns," he says.

With such snafus in store for e-filing, Sridhar wouldn't

totally blame the assesses for giving their computer mice the cold shoulder.

"The fact is that our NIC server always 'hangs'," Sridhar quips.

"I do agree that broadband connectivity is an issue with assesees. Where

transaction speed should be optimum not something which takes ages to download,

the assesees get fed up and decide to file their returns manually or through

floppies and CDs. It is a leviathan task to persuade them to file their returns

online instead of burning them to CDs, even if we assure them of data

confidentiality."

However, Sridhar is optimistic that the connectivity speeds

will improve by next year, even as the government is pushing the accrual method

of accounting-online collection, consolidation and collation of data. Even a

CENVAT verification process online to capture sales invoices from over 1 lakh

assessees at the national level. "Of course, as of today, we are still

struggling to attract assessees to fill up even their ER-1 forms," Sridhar

says. "We would seek further involvement from assessees in filing returns

online."

Rajesh Singh who filed returns online for a leading watch

company says, "Why blame assesees when the system seriously lacks options?

Who wouldn't be turned off when even unit definition problems for goods are

not sorted out before being ported online? Often, the excise department's

online database for ER-1 forms accepts import quantities to be filed only in

kilograms. The tariff directory does not even mention other units."

However, Sridhar counters the poor 'data entry quality' displayed by online

assesees. "We have noticed that assessees make too many mistakes when

entering unit quantity codes. Vigilance at their end while entering data would

help everybody."

While e-filing and e-payment will help industries and government

departments to focus more on business without unnecessary interactions and

paperwork and keeps costs of collection down, the lack of interface options with

ERP programs is galling, say officials. They feel that e-filing would become a

discernible trend if the government permits more banks to participate in the

Real-Time Gross Settlement (RTGS) to collect excise and service taxes on its

behalf.

Ravi Menon