1. E-checkpost A New Paradigm

2. COMMERCIAL TAXES DEPARTMENT BACKBONE OF STATE’S FINANCES BUT: Outdated systems lead to pilferage and corruption. Cost of compliance very heavy for tax payers – permissions, frequent visits, harassment Paper based systems unable to cope with high volumes. Emphasis on regulatory role and policing Bogged down by routine work – no attention to analysis High pilferage More physical controls Higher cost of compliance and discretion More corruption

3. E-CHECK POST IS A COMPONENT OF A LARGER ‘PROJECT TRANSFORMATION’ Department as regulatorFrequent visits by dealersPolicing by DepartmentPaper based information Old paradigm – Post event confirmation Department as a service provider All services at doorstepsSelf Policing by DealersEverything is electronic New paradigm - Pre event confirmation

4. E-CHECK POST – A PART OF TOTAL TRANSFORMATION OF A SYSTEM A new paradigm - E-Checkpost Accessibility through mobile phone Transparency and Accountability Involving common citizens Services at doorsteps e - Suvega e - CST Comprehensive Assessment System e - Grahak e - Payment e - Vardan e - Varadi e -Grievance e - SUGAM E - Parivarthana m - Sugam

5. THE BIRTH OF CHECK POST Every dealers has to issue a bill in a prescribed format. The entire effort of the department is to make a dealer issue a bill and then somehow force him to account it. Logistics demand that every retail sale has to be preceded by a bulk sale. The bulk sale has to take place through a truck. Checkposts are set up at vantage points to monitor these bulk sales.

6. 1 At checkpost, a copy of the bills is collected for a subsequent cross verification with the dealers books of accounts – thereby ensuring that once a bill is collected at checkpost, the dealer definitely accounts the transaction and pays due tax. 2 When goods transit through the state, the entry check post issues a transit pass, which has to be surrendered at the exit check post. This ensures that the goods destined to other states are not sold within Karnataka, outside the accounts of the dealers. CHECK POST – 2 BASIC ACTIVITIES

7. THE DELIVERY NOTE  It was discovered that some dealers were using parallel bill books to evade tax  To encounter this, department decided to supply the Bill Books. The leaves of Bill Book were enabled to have certain security features.  These Department supplied Bill Books were called Delivery Notes (in triplicate).  The intention was that the dealer would be forced to account in his bill books, as the Department would have the correct number of the Delivery Notes issued to a Dealer.

8. CHECKPOST: A LOSE-LOSE-LOSE SYSTEM 1 The number of documents collected per day was about 1,00,000 – thereby rendering any cross verification impossible. 2 Non surrender of a document at a checkpost generated huge benefits for dealers – scope for corruption. 3 Tremendous discretion for checkpost officer. 4 Long waiting time for transporters at checkpost 5 Collected documents would sometimes be sold back. 6 Dealers faced difficulties in obtaining the blank delivery notes.

9. SOLUTION: A PARADIGM SHIFT Earlier regime based on philosophy that dealer should use delivery note and Department’s entire effort was geared towards making dealer account the transaction in his/her books of accounts. This paradigm sought to be reversed in – e- Sugam – The dealer accounts the transactions first and only then can he/she despatch the goods. E- SUGAM (Simple Uploading of Goods Arrival and Movement)

10. SOLUTION: A PARADIGM SHIFT Instead of filling up forms at checkposts and officer then issuing each transit pass, the system is now transformed as below - Before dispatch from origin, details now uploaded online with generation of a Unique No. On arrival at checkpost, this unique number is converted to a transit pass instantaneously by the officer, post verification using the system. e-Suvega (Simply Upload about VEhicle and Go Across) conceived to - Reduce hardship of transporters on one hand Prevent dumping of goods from other states to avoid tax, on the other hand. E- SUVEGA (Simply Upload about VEhicle and Go Across)

11. COMPARISON BEFORE AND AFTER E-CHECKPOST BEFORE AND AFTER E-CHECKPOST

12. THE E – CHECK POST - CHALLENGES E - CHECK POST BPR – New Laws, Rules & Procedures Technological Interventions – e- Sugam, m-Sugam, e-Suvega Environment Building Capacity Building Supervision and Discipline Transparency in Personnel Policy

13. BUSINESS PROCESS RE-ENGINEERING 1 Change in law – Policy advocacy Unique Selling Proposition was – Checkposts become hassle free. 2 Change in Rules – Trade Bodies involved in drafting new rules. 3 Change in form – Re-design of forms The forms and screens designed by end users.

14. TECHNOLOGY INTERVENTION  Web based system for 4,50,000 + dealers.  CTDWAN for networking 2000 systems located in 176 offices/check posts.  Integrated with SMS gateway of NIC.  A control room, working 24X7, has been established.  The software development by an in- house team of NIC.

15. M-GOVERNANCE THROUGH M-SUGAM  Mobile based facility given to dealers for SUGAM no.  The dealer now needed to send only critical parameters of SUGAM, in the prescribed format through SMS.  The system verified the request and returned the SUGAM No. through SMS instantaneously.  Mobile squads also enabled to verify the validity of SUGAM no. shown by transporters and update their verification findings in the system by sending SMS.  Mobile based facility given to dealers for SUGAM no.  The dealer now needed to send only critical parameters of SUGAM, in the prescribed format through SMS.  The system verified the request and returned the SUGAM No. through SMS instantaneously.  Mobile squads also enabled to verify the validity of SUGAM no. shown by transporters and update their verification findings in the system by sending SMS.

16. ENVIRONMENT BUILDING – WINNING OVER THE DEALERS  Interactive meets with trade bodies to introduce the concept.  Main selling point – dealers no longer required to come to tax offices to obtain ‘Delivery Notes’ and trucks would get instantaneous clearance at checkposts.  Electronic C forms had already been introduced, trading community was very happy with Department’s reforms.  On ground success seen when different trade bodies started competing with each other to organize training programmes. Department just provided the resource personnel.  Interactive meets with trade bodies to introduce the concept.  Main selling point – dealers no longer required to come to tax offices to obtain ‘Delivery Notes’ and trucks would get instantaneous clearance at checkposts.  Electronic C forms had already been introduced, trading community was very happy with Department’s reforms.  On ground success seen when different trade bodies started competing with each other to organize training programmes. Department just provided the resource personnel.

17. CAPACITY BUILDING – ENABLING THE OFFICERS AND OFFICIALS  All officers/officials imparted week long mandatory training on E- governance initiatives and basic Computer skills.  Administrative Training Institute and District Training Institutes used.  Training programme was completely hands on, with Trainers selected from the department.  All officers/officials imparted week long mandatory training on E- governance initiatives and basic Computer skills.  Administrative Training Institute and District Training Institutes used.  Training programme was completely hands on, with Trainers selected from the department.

18.  Rotation system adopted for staffing at checkposts.  In-cognito inspection of checkposts by supervising officers  Online monitoring of checkposts.  Rotation system adopted for staffing at checkposts.  In-cognito inspection of checkposts by supervising officers  Online monitoring of checkposts.

19. THE MILESTONES !

20. E - SUGAM The transporters of the entire country enabled. Every day 600+ transporters are obtaining and surrendering 2000+ Transit Pass consignments. E - SUVEGA 4,50,000+ dealers of the state enabled. Dealers download 85,000+ SUGAM numbers every day. Database captures 2.5 Crores+ high value invoice records every year. 12,000+ SUGAM numbers verified at checkpost every day.OUTREACH Note - Reputed transporters all over the country, do not book goods to Karnataka unless provided with SUGAM / SUVEGA numbers by the dealers.

21. THE OUTCOMES - 1 Advantage Trade Dealers no longer come to the offices. About 20,000 visits of dealers saved per day. Zero scope for corruption. Fast Track Transportation Check posts became much more friendly. The delays at check posts were reduced.

22. THE OUTCOMES - 2 Efficient Tax Administration Tax administration has become more efficient. There was a marked increase in revenue (cannot be ascribed to Sugam only). The drudgery of officer has reduced and his/ her accountability has increased. Environment friendly Saves about one ton of paper per day. Saves waiting time and fuel consumption at check posts for transporters.

23. THE UNIQUE FEATURES 1 It was totally home grown. 2 An excellent example of convergence of Government agencies and resources. 3 Magnitude is huge. 4 Self-policing by trading community. 5 In the last three years, not even once has the system failed. 6 Because of in-house team of NIC, managing the software, and updating software becomes hassle free. 7 This project represents a WIN-WIN-WIN situation.

24. REPLICABILITY 1 NIC is supporting North Eastern States - Arunachal Pradesh, Sikkim, Nagaland, Tripura and Mizoram to implement this model. 2 From 1 June, 2012, Bihar has introduced a similar system called “SUVIDHA”. 3 Andhra Pradesh has replicated this system. 4 Number of states have visited and studied the system for replication – UP, Uttarakhand, Chhattisgarh, etc.

25. THE WAY FORWARD Sugam-2 : The double ended Sugam Interstate Sugam Gradual removal of check posts and substitution with random checking through mobile squads. Remote reading of e-Sugam.

26. REASONS FOR SUCCESS Totally homegrown model. Tangible benefits to all stakeholders, which has made the changes irreversible. A systems approach – e-Checkpost was a part of larger Reform initiative by the Department – ‘PROJECT TRANSFORMATION’.