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Online tax tab on traders planned

New Delhi, Sept. 7: The government plans to soon set up a Rs 50-crore inter-state exchange system that will provide online information on tax-related transactions undertaken by traders in different states.

This is expected to help improve the monitoring of collection of commercial tax like sales tax by the state governments. An empowered committee consisting of representatives of various state governments and the finance ministry has been set up to pick up the hardware and software vendors for the project.

Three consortia have been shortlisted to submit technical bids — the first is led by CMC and comprises Oracle and Bharat Sanchar Nigam; the second comprises Wipro and Bharti Tele-Ventures, while the third is led by Infosys. The financial bids are expected to be opened by the month-end.

The pilot project is to be implemented in seven states —Andhra Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh, Haryana, Delhi, and Punjab.

A senior finance ministry official said, “Initially, the sales tax departments of all the seven states will get connected and then slowly all other details relating to central and sales tax, entry tax, professional tax and other taxes that have Centre-state features will be amalgamated. The details will be accessible from a central server that will be located in Delhi.”

“If the pilot project is successful, we will connect all the states. It would be undertaken in phases with states in the west and south to be integrated followed by the east,” the official said.

However, a few states have raised objections about the viability of the consortium led by CMC, Oracle, and BSNL. According to sources who attended the meeting of the empowered committee in Delhi last month, “A few states had sought clarification on the consortium and said they had inherent conflicts. Any objection is valid as we want to build a system that is robust and should have performance credibility of 95 per cent.”

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