Value Added Sales Tax Information System

Abstract

Value Added Sales Tax Information System (VASTIS) is an IT solution for the
Value Added Tax (VAT) System. It is a software product which aims for the automation
of the APVAST Act, which was passed in Andhra Pradesh state Assembly.

Value Added Tax is a tax that applies to all commercial activities involving
the production and distribution of goods and the provision of services. It is a
consumption tax, borne ultimately by the final consumer. It is charged as a
percentage of prices.

It is collected fractionally, via a system of deductions whereby taxable

persons (i.e., VAT-registered businesses) can deduct from their VAT liability the
amount of tax they have paid to other taxable persons on purchases for their
business activities. This mechanism ensures that the tax is neutral regardless of
how many transactions are involved.

This project benefits the citizens with greater transparency, convenience,

timeliness, responsiveness and lower overall costs. For the governments, the main
benefits are the greater trust that the citizens will repose and the cost-savings
achieved by these services. For the commercial organizations, the benefits will
accrue from their effectively seizing the opportunity for some outsourced services
and new marketing opportunities.
Existing System -

State of Andhra Pradesh is organized as having More than 100,000 dealers, who deal in
200+ different commodities. 182 different circles, handling VAT registration request, appeals,
inspections, payments, returns & assessments. And 21 divisions, dealing with registration
authorization, audits, appeals & investigations through this system. The Manual Processing Cost:

 There are more than 60 notices to be generated for different processing requirements.
 More than 80 forms per dealers.
 More than one tax rate for 200+ commodities.

Doing these manually creates:

 Delay in registration, processing & Intimation process.
 Lack of customized information as per requirements information at the functional
units of CTD (circles, divisions, check posts).
Proposed System
 IT enabling the services:

Government of AP realized the need of hour is to IT enable the Tax Administration to

maximize tax revenue by

 Improving operating efficiency by empowering efficiency by automating the

complex tax payable calculations.
 Avoiding delays, by automating the workflow (acknowledgement-data entry-
processing-decision making).
 Improving dealer servicing using dealer friendly services at the time of
registration return processing & interactions with CTD.
 Simplicity:

In VAT there are only two main tax rates. So, Vat would be much easier to administer
and comply with. The disputes relating to the stage of tax is another major area of litigating
today, would practically disappear.

 Adjustment of Tax paid on goods purchase:

Adjustment of tax today is restricted to the amount of tax payable with the no
provision for refund or carries over of excess tax paid except in case of export of
manufactured goods out of the country or sale to registered dealers.

 Transparency:

The system of levy of sales tax at first stage is not transparent, as the amount of
tax, which the goods have suffered, is not known at the subsequent stages.

 Fair and Equitable:

As stated above, there would be uniformity in tax rates across the states and no
unfair tax advantage to any under VAT system, so the system would be equitable & fair to
all.

 Procedural Simplification:

Procedural simplifications relating to assessment, appeals, revision and

proceeding review have been carried out along with the introduction of VAT.
  Minimizing Discretion:

Under VAT system, it is proposed to minimize discretion with assessing officers

that similarity placed persons are treated alike. For example, there would be no discretion
in imposing of penalty or the amount of penalty in case of late filing or non-filing of
returns, late or non-payment of tax or evasion or avoidance of tax.

Merits of Proposed System -

 Reduces Manual work.

 Accessibility all over the country providing online e-registration, e-filing, e-Payments.
 Creating intelligence by crosschecking data entered by dealers and identifying potential
dealers to be upgraded to different tax structure.
 Layered security to prevent unauthorized access.
Software Requirements:

Windows : xp, NT, 98/2000

Technology : Java/j2ee (JDBC, Servlets, Jsp)
Web Technologies : Html, JavaScript
IDE : Net Beans
Web Server : Tomcat 5.0
Database : Oracle (any database)
Software's :J2SDK 1.5, Tomcat 5.5, Oracle 9i

Hardware Requirements:

Hardware : Pentium based systems with a minimum of P4

RAM : 256MB (minimum)