Amit Mitra at Writers’ on Monday. (Bishwarup Dutta)

Calcutta, July 25: The cash-strapped Bengal government is banking on technology to shore up its sales tax collections and build its case that it is doing its bit while it waits for central assistance.

Announcing the launch of an e-governance initiative in the commercial tax directorate, finance minister Amit Mitra said the shift to the new system would add to the state’s earnings.

“The e-governance initiative will result in better compliance and increased revenue collection. Most small businessmen use computers. They will benefit from the new system. It will be hassle-free and also reduce the chance of corruption,” Mitra said.

Experts in public finance are of the opinion that an e-enabled system is superior to a manual one as it reduces the scope of human interference and weeds out corruption, which is often cited as the reason behind poor revenue mobilisation in Bengal.

Last year, sales tax revenues grew 26 per cent to Rs 13,500 crore. Over 2.2 lakh dealers were assessed through the system.

Although Mitra refused to set any target for increased revenue collection or the number of dealers to be assessed, he hinted that the growth would be higher this year with the introduction of the new system.

The initiative comes at a time the Centre and the Trinamul leadership are locked in hard bargaining over funds allocation.

According to Mitra, five key functions of the commercial tax department can be done online from now. The Rs 69-crore project — with the Centre funding 75 per cent of it — includes the following:

• e-registration and dematerialisation of registration certificates

• e-return under the West Bengal Sales Tax Act

• e-payment under the industrial promotion assistance scheme through electronic clearing system

• e-refund of value-added tax and payment of refund though electronic clearing system (ECS)

• e-submission of the option under the composition scheme in Form 16

“Online VAT registration and dematerialisation of registration certificates will remove the problems involved in manual and paper-dependent registration. The hassles of getting the certificate in its physical form will also end,” the finance minister said.

Besides introducing the new system, the government is making online VAT registration compulsory. To help dealers switch to the new system, 151 facilitation centres will be set up across the state.

In an attempt to expand the use of technology in all major areas of commercial tax collection, the government has extended the facility of filing online returns to all dealers registered under the West Bengal Sales Tax Act, 1994. Until now, the facility was available only to the dealers registered under the VAT act and the central sales tax act.

The e-governance initiative includes payment of industrial assistance to small- and medium-scale industrial units directly to the dealers’ bank accounts through the ECS. “The new system will reduce delay in the release of assistance and bring about greater transparency,” said the finance minister.

As the existing system of granting VAT refunds to exporters is manual and involves a lot of paper work, the government has made the system online. “The process involves two major changes. Exporters will now receive 90 per cent of the refunds in place of 75 per cent. The refund will be made directly to the dealer’s account through the ECS,” Mitra said.

The directorate is also introducing the system of online submission of Form 16 to overcome the drawbacks of the existing manual system.