Abstract
Business process redesign is a critical aspect of change management which lies at the heart of organizational transformation. Managing change is never easy and Indian Income Tax Department (ITD) sought to remove redundancy for taxpayers as well as ITD by setting up Centralized Processing Center (CPC) Bangalore. Use of technology as a strategic tool to revolutionize the filing and processing of tax returns in India has a number of social implications for society in addition to achievement of primary objective of increasing IT collections for the Indian Government. Minimal interaction between taxpayers and IT officials reduces the scope of corruption and encourages taxpayers to pay legitimate share of taxes. Prompt tax refund also creates a perception of an honest and efficient IT system which morally discourages tax evasion. Public private partnership (PPP) model with Infosys as private partner enables government to utilize world class services of a highly intensive information technology company. Apart from significant financial benefits of such an arrangement (lower cost of compliance), tax reforms initiated as a result of setting up CPC have the potential to significantly enhance quality of life of a large section of Indian society.
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Income Tax Department in India works under overall jurisdiction of Ministry of Finance, Government of India. Visit http://www.incometaxindia.gov.in and http://www.finmin.nic.in.
http://finmin.nic.in/kelkar/Full_Report.pdf accessed on 10 December 2012.
As per the Kelkar Committee Report on Tax Reforms in India, ITD should concentrate on its core functions and should be allowed to outsource data entry work and clear the backlog of returns (which stood at massive 2.5 crores) as of end of February 2003.
Income-tax returns (ITRs) can be submitted by taxpayers in different prescribed forms depending on type of taxpayer and income to be reported therein.
Lower tax revenues and poor disinvestment receipts have pushed up the Government’s fiscal deficit for 2011–2012 to 5.9 % of GDP as against the target of 4.6 % http://www.indiabudget.nic.in accessed on 10 December 2012.
Infosys is a leading Information Technology company in India http://www.infosys.com.
This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to an Unstarred Question in Rajya Sabha on 3 August 2010.
The term jurisdiction means extent or range of judicial, law enforcement, or other authority as per http://dictionary.reference.com/browse/jurisdiction accessed on 11 December 2012.
Technological advancements have led to birth of a new set of entrepreneurs who are more dynamic than their predecessors such as Infosys, Facebook, Microsoft, Google, and many more such enterprises.
Case writer’s observations on visit to CPC Bangalore on 22 December 2011 and Annual Report Financial year 2011–2012 of Ministry of Finance available on http://finmin.nic.in/reports/AnnualReport2011-12.pdf accessed on 12 December 2012.
The call center is designed to address any query that the taxpayers may have. The helpline no. is toll free 1800-425-229 or 080-22546500.
Out of total electronic returns of 12,201,244 filled up to 26 November 2012, about 2,622,757 were returns from Maharashtra—http://incometaxefiling.gov.in accessed on 12 December 2012.
Traditionally, business process redesign cuts across functional boundaries—Short and Venkatraman (1992).
In the financial year 2011–2012, the total number of income-tax returns filed was 4 crore only for a population over 1 billion—e-filing of income-tax returns mandatory for some taxpayers—Business Today, July 2012 available on http://businesstoday.intoday.in/story/e-filing-income-tax-returns-becomes-mandatory-some-taxpayers/1/185704.html.
Income tax department has set up a Tax Information Network (TIN) as a repository of important tax related information. National Securities Depository Limited (NSDL) hosts TIN http://www.incometaxindia.gov.in/TINinfo.html?abc=1.
Income Tax Department is a Government body and an arm of Central Board of Direct Taxes (CBDT) of India. It is responsible for administering tax collection as per Income Tax Act (1961) in India.
Finance Ministers’ budget speech in Parliament available on http://indiabudget.nic.in/budget2012-2013/bspeecha.asp accessed on 8 December 2012.
http://finmin.nic.in/reports/annualreport2009-10.pdf accessed on 8 December 2012.
E-filing of income-tax returns mandatory for some taxpayers—Business Today, July 2012 available on http://businesstoday.intoday.in/story/e-filing-income-tax-returns-becomes-mandatory-some-taxpayers/1/185704.html accessed on 12 December 2012.
Setting up of CPC is an initiative toward further improving efficiency—Finance Ministers’ budget speech in Parliament available on http://indiabudget.nic.in/budget2009-2010/bspeecha.asp accessed on 8 December 2012.
Finance Ministers’ budget speech in Parliament available on http://indiabudget.nic.in/budget2011-2012/bspeecha.asp and Annual Report Financial year 2011–2012 of Ministry of Finance available on http://finmin.nic.in/reports/AnnualReport2011-12.pdf accessed on 12 December 2012.
Annual Report Financial year 2011–2012 of Ministry of Finance available on http://finmin.nic.in/reports/AnnualReport2011-12.pdf accessed on 8 December 2012 .
Annual Report Financial year 2011–2012 of Ministry of Finance available on http://finmin.nic.in/reports/AnnualReport2011-12.pdf accessed on 8 December 2012.
Report of the Committee on Roadmap to Fiscal Consolidation, September 2012 available on http://finmin.nic.in/reports/Kelkar_Committee_Report.pdf accessed on 10 December 2012.
Two more CPCs will become operational in Manesar and Pune during 2012–2013 and a fourth CPC will come up in Kolkata in 2013–2014 ITD invites fresh bids for Pune and Manesar CPCs—11 December 2011 available on www.taxguru.in.
Scrutiny means detailed investigation of the information stated in the ITR. Every year only a few cases are selected for scrutiny assessment based upon some predetermined criteria.
Davidson (1993).
Hammer and Champy (1993).
ITD invites fresh bids for Pune and Manesar CPCs—11 December 2011 available on www.taxguru.in.
On 19 November 2012, Honorable Finance Minister of India Sh. P. Chidambaram compliments the Income Tax Department (ITD) during CPC, Bangalore visit. The following remark in visitor’s book at CPC Bangalore sums it up “I am greatly impressed by what has been created and put in place at the CPC. The CPC represents a technological leap for the IT Department. Undoubtedly, the CPC has resulted in better, quicker and more efficient service to the taxpayer community. I warmly congratulate the IT Dept on this splendid achievement. I urge the IT Department to continuously upgrade the technology and provide full satisfaction to the taxpayers.”
References
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Income Tax Act (1961)
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Vijay Kelkar Committee Report. http://finmin.nic.in/kelkar/Full_Report.pdf
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Singhania, M. CPC Bangalore: business process redesign. Decision 40, 135–144 (2013). https://doi.org/10.1007/s40622-013-0005-1
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DOI: https://doi.org/10.1007/s40622-013-0005-1