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The advisory
Group on Tax Reforms under the Chairmanship
of Dr. Vijay Kelkar had recommended networking
of Income Tax Department, Banks and Reserve
Bank of India to facilitate On-line Transmission
of details regarding tax collection/refund,
etc. between banks and offices of Income Tax
Department and also RBI for settlement of
funds.
To
examine the various issues relating to implementation
of the Kelkar Committee recommendations
stated above, the RBI constituted a High
Power Committee in February 2003, under
the Chairmanship of Shri B. Swarup, Member
(Inv.), Central Board of Direct Taxes (CBDT)
to recommend suitable measures in this regard.
Chairman, IBA was a Member of this Committee.
The
High Power Committee under the aegis of
the RBI constituted a Sub-Group on Business
Processess Designing for the OLTAS, under
the Chairmanship of Shri C.B. Bhave, Managing
Director, NSDL, Mumbai and Chief Executive,
IBA as one of its members. The Group recommended
that a Single Copy Challan should be adopted
for payment of taxes as recommended by Kelkar
Committee for simplifying the process for
the tax payer. Accordingly, Single Copy
Challan has been introduced in place of
4 Copy Challans from 1st June 2004.
The
High Power Committee constituted a Technical
Sub-Committee, chaired by Shri R.N. Ramanathan,
Dy. Managing Director (IT), State Bank of
India and with representatives from Income-tax
Department (Systems), Controller of Accounts,
CBDT, RBI and IBA, to address all issues
for conducting pilot studies on On-Line
Tax Accounting System (OLTAS). The Technical
Sub-Committee held several meetings in the
IBA and finalized the record structure and
file format for the On-Line Transmission
of tax information from the collecting banks
to the TIN (Tax Information Network at NSDL)
and the Income Tax Department. The Technical
Committee also finalized the modalities
for conducting pilot studies on OLTAS and
three pilots were launched between June
2003 and April 2004:-
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Phase
I
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Phase
II
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Phase
III
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Conducted
from 9th June 2003 to 15th July 2003
involving selected branches of 15 Public
Sector Banks in the 4 Metros of Mumbai,
Delhi, Chennai and Kolkata
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Conducted
from 1st Sep. to 15th Nov. 2003. During
this phase, the no. of centres were
increased to 8 viz. the four metros
of Mumbai, Delhi, Kolkata and Chennai
and Cities of Ahmedabad, Bangalore,
Hyderabad and Pune.
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Conducted
from 1st Dec. 2003 to 31st May 2004.
No. of participating banks increased
from 15 to 19 incl.HDFC Bank, ICICI
Bank, IDBI Bank and UTI Bank. From 1st
Feb. 2004, the 12 remaining banks collecting
IT also joined the Pilot, thus bringing
the total no. tax collecting banks to
32 including RBI
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Originally,
the Pilot on OLTAS was confined only to the
corporate tax payers, however, after 15th
February 2004, the project covered both corporate
and individual tax payers and finally, from
1st June 2004, the Pilot went All-India, covering
all the authorized branches of the 32 participating
banks all over the country.
Several
measures were taken to ensure smooth operations
under the OLTAS. A crack team was setup
in the IBA with members from CBDT, RBI,
NSDL, SBI and banks for resolving problems
immediately before and after the launch
of the OLTAS project. A central technical
help desk was setup at every bank to attend
quickly to technical problems at the bank
level. Additional arrangements for receipt
of tax challans and help desks were setup
at collecting branches to clarify the queries
that may be raised by the assesses at the
branch level during peak time. Declared
under the Mission Mode, the OLTAS project
is monitored at the highest levels.
Settlement
of funds under OLTAS:
Originally, the OLTAS Project covered only
the tax information data. The funds collected
by the bank branches followed the manual
mode and was reconciled with the paper scrolls
sent to the ZAO. However, from 1st April
2005, the OLTAS Pilot Project was commercially
rolled out and the settlement of funds was
also migrated to on-line mode. Thus, from
1st April 2005, the banks had to reconcile
funds collected on a day to day basis with
the electronic data reported by banks to
TIN.
With
over 12000 branches reporting tax data,
there were several issues related to quality
of data being uploaded to TIN. For overseeing
all such issues, the High Powered Committee
has constituted a Monitoring Group under
the Chairmanship of Member (Revenue), CBDT.
The Committee meets regularly and addresses
areas of concern. At its recent meeting
held on 30th January 2006, the Group discussed
the following issues among others:
a) Of the 12000 total number of branches
collecting taxes, 60 were found not to be
reporting to TIN. These were found to be
mainly those that had nil collections over
several months/ years and had applied for
delisting.
b) While number of challans with missing
PAN / TAN were negligible, the number of
records with fictitious / non-existent PAN
/ TAN continued to be approximately 10%.
For addressing this issue, various measures
were discussed and agreed upon. These included
introducing bar-coded pre-printed challans,
verifying PAN / TAN entry against a regional
database provided by the Income-Tax department,
using the bulk query facility of the Income
Tax department, etc. It was decided that
in certain cases, the banks could also request
for a copy of the PAN / TAN card from the
tax payer.
c) Reconciliation of the funds settled with
the RBI and the OLTAS data transmitted by
banks on day-to-day basis. The difference
for January 2006 was found to be only 2.46
crores while the total tax collection was
Rs.7327.40 crores.
With
concerted effort from the CBDT, RBI, the
banks and the IBA, the On-line Tax Accounting
for the Direct Taxes has become a reality.
This project is one of its kind in the whole
world.
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