1. Reforming the Taxation System in Nagaland Through “Taxsoft” Presentation by: Asangba Chuba Ao Commissioner of Taxes
Department of Taxes, Nagaland

2. Introduction to Nagaland
Department of Taxes, Nagaland

3. Nagaland: A Bird’s Eye View
One of the smallest states in India: 16,579 sq km
Predominantly Tribal Population: 19,78,502 ( Census 2011)
Developmentally backward due to remoteness, lack of proper infrastructure, prolonged insurgency, untapped resources, hilly and difficult terrain
No major industry , economy is largely agro based
Consumers wholly dependent on goods imported from other states and abroad
IT connectivity is also very weak, specially in the hilly areas
People largely unaware about taxation systems. Tribals exempted from Income Tax
Department of Taxes, Nagaland

4. Taxes: The backbone of state finances
The department collected about Rs 325 crores as revenue for the state in
Contributes about 60% of state’s internal revenue
VAT and Sales Tax are major components
About registered dealers collect tax on behalf of the government and remit it
The department has 9 offices spread all over the state with workforce of 270 officers and staff
“Taxsoft” is one of the pioneering e Governance initiatives in the state
Department of Taxes, Nagaland

5. Deficiencies of the earlier “Manual” system
Cost of compliance was very heavy for tax payers- frequent visits to offices, harassment, delays
Scope for connivance of tax officials with tax payers due to lack of controls/monitoring leading to corruption and evasion
Inability of the system to capture information and channelize it purposefully and effectively
Paper based systems with inbuilt inefficiencies and opaqueness.
No effective mechanism to track volume of transactions taking place- as a whole, dealer wise, commodity wise etc
Large scale misuse of manual statutory forms such as declaration forms leading to evasion of tax
Department of Taxes, Nagaland

6. The Taxsoft Project: An overview
Mission Mode Project under NeGP funded by GoI and State Govt. in 90:10 ratio
Aims to simplify tax administration & compliance through ICT intervention
Customization & Implementation of application called Taxsoft developed in collaboration with NIC, Karnataka.
Website:

7. Modules of ‘Taxsoft’ MIS Reports e-TDS e-Audit e-Challan System Admin
e - Registration
e - Returns
e - Payments
e –
Waybills
e-Transit Pass
e - Sales & Purchase
e - CST
e-TDS
e-Audit
e-Challan
Online Helpdesk
MIS Reports
Department of Taxes, Nagaland

8. Service Delivery Channels
Website;
Application for Services
Status Tracking
Certificate / Forms Printing
Other Information
Facilitation Centers;
Mobile;
SMS Alerts
Payment Confirmation
Service related updates – Eg. Waybill Password

9. e Registration Mandatory online registration
Traders no longer have to visit Tax offices for registration. This has reduced unnecessary tax office-tax payer interface.
Issue of certificates also made online
Application status can be tracked
Confirmation of registration through SMS with allotted TIN
PAN- Permanent Account Number for Income Tax purposes also made mandatory for registration under VAT- groundwork for GST
Department of Taxes, Nagaland

10. e Returns All traders can file returns electronically
Mandatory for tax payers with turnover above Rs 40 lakhs per annum
Auto calculation of tax and interest inbuilt into the system
Provision for filing revised returns
Auto generated SMS alert sent when return is due
Department of Taxes, Nagaland

11. e Payment
Payment of tax in cash/ cheque full of problems especially for big tax payers
Security issue was/is a major concern
Weak Treasury-Bank linkages led to delays, harassment, red tape
Reconciliation with the department sometimes took months
Payment process time and effort drastically reduced
SMS alert with BURN on successful transaction
Reconciliation process is done in real time
Department of Taxes, Nagaland

12. e Waybill Every goods carrier had to be accompanied by a waybill
Blank waybills issued by tax offices
These filled waybills were collected at the check post
Number of documents collected was very large making it impossible to cross verify
Non surrender of these waybills would benefit dealers immensely leading to tax evasion
Now, all transaction details captured online
Can be verified from anywhere
Quick transit at check posts
Department of Taxes, Nagaland

13. e- Waybill: Cross verification at Check posts
Dealer
Logs into website
Enter & Submit Waybill Details
Share the OTP
Generation of
Waybill No &
One Time Password
(OTP) by the system
Send SMS alert to dealer along with OTP & Waybill No
Selling Dealer/
Transporter
Login using TIN No & OTP
Update Transporter/
Vehicle details
Print Waybill
Checkpost Authority
Logs into Website
Enter Waybill No given by the transporter
Verify Waybill & allows the Vehicle to Pass
Department of Taxes, Nagaland

14. e CST
Large scale misuse of statutory forms which would give concessional rates of tax to the tax payer
Issue of forms beset with problems such as speed money, issuance to unregistered agencies, issue in one firms name and use by another etc.
Utilisation certificates were hardly submitted and even if submitted cross verification was next to impossible and time consuming
Present system ensures that the trader receiving the consignment applies online with all details of the transactions
The details of the form are kept in the public domain for anyone to verify authenticity
No need for verification as the transaction gets debited to both tax payers accounts.
Self policing system
Department of Taxes, Nagaland

15. ‘Taxsoft’ Highlights Web Based Application
Security and Authentication – Unique User IDs and Passwords are provided to Dealers and Officials to manage and operate their accounts
Entire cycle of Return filing, scrutiny and disposal is automated as all calculations are done by the system during Return Entry
Waybills are generated with One Time Passwords (OTP). Interface is provided to Transporters /Selling dealers to update information
MIS Reports are available in every Module at each level of users
Department of Taxes, Nagaland

16. ‘Taxsoft’ Highlights (Continued..)
Inter Module linkages has reduced the scope for entering incorrect information
All Service Requests/ status can be tracked online
Acknowledgement/ confirmation alerts are provided in the form of SMS
Department of Taxes, Nagaland

17. Uniqueness of ‘Taxsoft’
e-Registration ,e-Payment, e-Returns, e- Waybills, e-CST have also been incorporated under Petroleum Tax and Amusement Tax Acts
Return Module is linked to Payment Module
Facility for issuance of notices to erring Dealers
Online Forms cannot be generated without entering transaction details in advance thus making dealer’s data transparent
Defined Timeline for auto approval of CST Forms
Department of Taxes, Nagaland

18. Uniqueness of ‘Taxsoft’ (Continued…)
Facility to update details related to Part Consignments & Transhipments in Waybills and Transit Passes
Two-Way SMS Facility  has been provided to verify genuineness of any Form
Any person can verify TIN, Waybills, and  CST Forms either issued online or offline (pre Taxsoft) 
Nagaland first state in the North East to make e- Registration (with PAN), e-Return ( for turnover >Rs 40 lakhs), e-Waybill and e-CST mandatory
Department of Taxes, Nagaland

19. Website Demo www.nagalandtax.nic.in
Department of Taxes, Nagaland

20. e - Services
Demo for Training & UAT

21. Refund & Composition Scheme
Waybill
Invoice Upload
CST Forms
TDS Entry
Refund & Composition Scheme
Return Filing
Department of Taxes, Nagaland

22. Achievements
A Total of e- Registrations done
VAT – 5821, CST– 4504,
Petroleum -90 , Amusement -7
Revenue collection of Rs Crs through online payments. 33% of all tax payment in made through e -payment
Tax collections from VAT increased by 40.5% in
Current trends show an increase in revenue fromVAT by around 50% in the first quarter of
Department of Taxes, Nagaland

23. Achievements (Continued…)
9 Private Agencies authorized to operate as Dealer Facilitation Centers(DFC)
No of Online CST Forms: 20319
No of Online Waybills :67097
No of Offline Forms uploaded: 94635
Transactions worth Rs 2850 Crores captured in
Dealers Workshop cum Training conducted throughout the state and a total of Dealers trained all over the State
Department of Taxes, Nagaland

24. Key Realised Benefits – 1 / 3
Pre – Taxsoft
Post Taxsoft
Multiple visits to Unit Offices/Banks/Treasury by Dealers for making Tax payments
e – Payment can be made by Dealers from their offices / homes which takes barely 5 minutes
Mandatory visit to Unit office by Dealers for obtaining Waybills, CST Forms
eWaybills can be generated on demand from anywhere
CST forms issuance have defined timeline- no delay
Information related to Waybills & CST Forms not captured
All information related to Waybills & CST Forms captured and stored digitally
Department of Taxes, Nagaland

25. Key Realised Benefits – 2 /3
Pre – Taxsoft
Post Taxsoft
Errors in Returns forms
The auto – calculate feature in the e – Returns form ensures error free return filing by Dealers
Lack of information sharing with Dealers
All public information displayed in the website
Status tracking of service request through unique Acknowledgement No
Department of Taxes, Nagaland

26. Key Realised Benefits – 3/3
Pre – Taxsoft
Post Taxsoft
Inefficient manner of tracking Dealer activities
Higher Efficiency in tracking Dealer activity through MIS reports generated by the system
History of Dealer transaction available on a click
Efficiency
Absence of an efficient mechanism to cross – check information provided by Dealers
Validation of information shared by Dealers is possible as modules in TaxSoft are interlinked
Department of Taxes, Nagaland

27. Challenges in Implementation
Changing the mindset of almost all stakeholders- dealers, trade bodies, tax officials, political executive
Overcoming low levels of understanding taxation especially among local traders
Poor IT connectivity
Pioneering e-Governance initiative- initially fraught with doubt and cynicism
…mostly overcome, some ongoing.
The flagship e-Governance reform in the state
Department of Taxes, Nagaland

28. Thank you…
Department of Taxes, Nagaland