Economic Intelligence Unit MSTD 1

I. Objective: -
1. Detection of Tax evasion cases to prevent revenue leakage
2. To support policy decisions by data analysis.
II. Functions:-
1. To carry out Risk Analysis based on data received from internal
and external sources
2. Based on risk analysis to recommend cases for
(i) Business Audit
(ii) Issue based Audit
(iii) Investigation
(iv) Returns Branch
(v) Registration Branch
3. To carry out star rating of all dealers
4. To carry out commodity analysis
Economic Intelligence Unit MSTD 2
 Joint Commissioner of Sales tax

DC Inter State DC 360 Degree

DC-(e-704) DC Registration
Data Analysis & Return
Analysis Analysis
(TINXSYS) Analysis
Joint Dir. Dealer Dy Dir.
DC Data DC Projects-
Profiling Commodity DWBI/Cyber
Analysis Unit Management
Forensic Lab
Sr No Designation Number of posts

1 Joint Commissioner 1
AC AC STO STO 2 Deputy Commissioner 6
3 Joint Director 1
4 Deputy Director 1
3 Assistant Commissioner 13
4 Sales Tax Officer 12
5 Research officer 6
Total 40

Economic Intelligence Unit MSTD 3

 • Internal sources: • External sources

 E-Registration • Active sources

• Imports data from Customs
 E-Returns
• Service tax
 E-Annexure with details
• Income tax
of Sale/Purchase/C-
• Central Excise
forms, etc. (e-704)
• TINXSYS
 E-payments • Planned sources
 E– Refund Application • State Excise
of Claims (e-501) • Stamp Duty
 Central Repository • RTO
• Border Check Post
• MCA

• Octroi
Economic Intelligence Unit MSTD 4
 • To carry out analysis of registration data
• To identify cases related to risky dealers on basis of PAN of
members
• To identify common patterns in risky dealers and apply logic for
other cases
• To determine the priority of Advisory visits on the basis of
Registration data ( after filing of first return)
• To identify the cases unregistered under Profession Tax on the basis
of e_704 data

Economic Intelligence Unit MSTD

7
 SN ACT ACTIVE CANCELLED TOTAL
1 VAT 729861 138307 868168
2 CST 569632 105909 675541
3 LT 4421 157 4578
4 ET 884 11 895
5 SCPT 398 3 401
6 PT-RC 326537 6741 333278
7 PT-EC 1990620 212176 2202796
8 TOTAL 3622353 463304 4085657

Economic Intelligence Unit MSTD 6

 SN NATURE_BUSINESS DEALERS

1 RESELLER 518368

2 MANUFACTURER 218499

3 IMPORTER 48574

4 EXPORTER 2810

5 WORKS CONTRACTOR 46631

6 OTHERS 33286

7 GRAND TOTAL 868168

Economic Intelligence Unit MSTD 7

 SN CONSTITUTION DEALERS

1
PROPRIETORY 632082

2
PARTNERSHIP 145080
3
COMPANY 56728
4 HUF 25853
5
OTHERS 8425
6
TOTAL 868168

Economic Intelligence Unit MSTD 8

 SN REASON FOR REGISTRATION DEALERS

1
407760
VAT RC TO TIN
2
273946
VOLUNTARILY
3
164157
EXCEEDED T.O. LIMITS
4
9947
CHANGE IN CONSTITUTION
5
8126
FULL TRANSFER OF BUSINESS
6 FULL TRANSFER OF BUSINESS DUE TO DEATH OF 3374
PROPRIETOR
7
858
PART TRANSFER OF BUSINESS
8
868168
GRAND_TOTAL
Economic Intelligence Unit MSTD 9
 SN PARTICULARS VAT % TO ACTIVE
DEALERS

1
Total number of records 850225
2 Inactive dealer records 130898
3
Active _ dealers 719327 100%
4 93.68%
PAN matched with CBDT database 673893
5 PAN matched but Dealer Name does not match 3.95%
28416
with CBDT database
6
PAN is not present in CBDT 10842 1.50%
7 0.36%
PAN Structurally Invalid 2624
8 0.49%
PAN not provided 3552

Economic Intelligence Unit MSTD 10

 Return Analysis Cell

Economic Intelligence Unit MSTD 11

Sr GTO of Sales No of Dealers Tax Paid
No. (Rs in Crores)

1 Less than Rs. 10 Lakhs

259840
2 Between Rs 10 to 50 Lakhs
190402
3 Between 0.50 to 1.00 Cr
56345
4 Between 1.00 to 1.50 Cr
30970
5 Above Rs. 1.50 Cr
108945
Total
646502 57764.39
 Sr No Particulars Rs in Crores
1 Receipts under MVAT ACT 53988.44
2 Receipts under CST ACT 3775.95
3 Receipts under S.C.P.T., P.T., E.T. AND 2481.70
L.T. ACTs
4 Receipts for other periods received in 5136.90
the Financial Year 2012-13
Total Receipts for the Financial Year 65382.98
2012-13

Economic Intelligence Unit MSTD 13

 1. Analysis of Non Form 704 filers (704 non transacting TIN )
2. Analysis of zero filers
3. Analysis of Risky Dealers
4. Analysis of Revised Returns
5. Comparative analysis with 360 data
6. Analysis of Builders and Developers
7. Analysis of Voluntary registered dealers and newly registered
dealers
8. Return non filers Analysis
9. Return Periodicity Analysis
10. Analysis of dealers showing ITC claim
unduly high as compare to earlier years

Economic Intelligence Unit MSTD 14

 1. Turnover of sales 30-40/50-60 Lakh
2. Constitution, nature, Type
3. Discloser in earlier periods
4. Consistently less Turnover (No growth of business)
5. Risk prone commodities
6. Major sales receipts shown as labour receipts
7. Inconsistent claims in returns

Economic Intelligence Unit MSTD 15

 704 Analysis unit

Economic Intelligence Unit MSTD 16

 E-704 cell, has prepared, on scientific basis, a
‘Risk profiling’ of 7.5 lac dealers by integrating
various electronic data available in the EIU.
 On the basis of the said profiling, e-704 cell
carries out following major exercises;-
◦ Prediction of suspected hawala dealers and identification
of Beneficiaries of Hawala dealers and the revenue
involved
◦ Identification of quantifiable and actionable revenue risk.
◦ Risk Rating of all dealers
◦ Analysis of circular trading and identification of bogus
refund cases through buffer suppliers who are in turn
effecting purchases from Hawala suppliers
  RC Score (YRS) (If active < 3 years, Score = -5, < 2 years, Score = -10, < 1 year, Score = -15)
 Dealer is Reseller (If Yes, Score=-10)
 Constitution is Proprietary (Score = -10), If dealer is Pvt. Ltd. (Score = -5),
 Dealer is multiple return type filer (Excluded from prediction)
 RC is taken voluntarily (Score = -5)
 Linked to Hawala Member PAN (If yes = -25)
 Whether Form 704 Non-filer ? (If yes = -10)
 Whether Return Defaulter? (If yes = -10)
 If a dealer is return defaulter , then based on amount of tax credit passed on to buyers, staggered
scores are given, the maximum is -25.
 Supplier to Hawala Score
 Return sales Non-Disclosure as per J2 of Others
 Tax paid to tax collection Ratio Score (If <5,-20,<8,-10)
 Tax paid to Tax collection score is TRUE and Tax paid is less than 100000 (If yes, -10)
 Tax paid Purchase to Total Purchase Ratio Score (If >92,-10)
 Interstate Purchase to Total Purchase Ratio Score (If <2,-10)
 Interstate Sales to Total Sales Ratio Score (If <2,-10)
 Taxable Sales to Total Sales Ratio Score (If >92,-10)
 Removal of Non risky commodities, activity and constitution.

Economic Intelligence Unit MSTD 18

 Sr. No Subject Figures

1 Total Bogus Dealers Identified 2,058

2 Total Beneficiaries (08-09/09-10/ 10-11 55,000

and 11-12)

3 Total tax revenue involved Rs.1,800 Cr

4 Total Recovery Till date Rs.717 Cr

Economic Intelligence Unit MSTD 19

Sr No Risk parameter for 2009-2010 & Explanation Detail Explanation of Parameter Revenue Risk
2010-11
Hawala Beneficiary as per ITC shown from supplier who is The dealer has purchased goods from non Revenue risk is Tax
annexure J2 of buyer non genuine dealer (Hawala) as genuine dealer (Hawala). credit taken from
1 per Annexure J2 of buyer. non genuine (hawala)
dealer.

Hawala beneficiary as per
annexure J1 of hawala (The tax
collection shown in Annexure J1
by Hawala seller is more than tax
2
credit shown by buyer in his
Annexuer J2 and not covered in
Parameter 1 as per annexure J2
of buyer)
Beneficiary of credit taken on
3 Fake( incorrect) TIN
ITC passed on to the dealer from Some Hawalas have filed form 704 alongwith J1 Revenue risk is Tax
non genuine dealer as per J2 Annexures. In J1 Annexure filed by Hawalas, credit given by non
Annexure J1 of seller (Hawala). TINs of purchasers /customers are mentioned. If genuine (hawala)
customer i.e. this dealer has not shown such dealer.
purchases in his J2, hence his ITC claim needs to
be checked in relation to this transaction &
reasons for not showing such purchases in J2
needs to be checked.
ITC shown from supplier whose The dealer has purchased goods from such Revenue risk is Tax
TIN is incorrect in Annexure J2 of dealers whose TIN number is not valid as per credit taken on
buyer. MAHAVIKAS. incorrect TIN.

Beneficiary of RC cancelled dealer ITC shown from supplier in The dealer has purchased goods from such Revenue risk is Tax
(RC of supplier is either cancelled annexure J2 who’s RC is dealers whose RC is cancelled prior to the credit taken from
or effective for subsequent cancelled because of relevant period. (e.g. The transaction pertains to supplier who’s RC is
period) discontinuance of business FY 10-11 & RC of the seller is cancelled on or cancelled before
4 before commencement of before 31-03-2010.) Or goods are purchased commencement of
financial year. from the dealer during their unregistered period. financial year.
(e.g. The transaction pertains to June 2010, but
the seller is registered during August 2010.)

Dealer is Beneficiary of Return ITC shown from supplier in The dealer has purchased goods from such Revenue risk is Tax
Non filer annexure J2 who is non filer for dealers who have not filed a single return nor credit from return
5 the complete year. paid tax during the relevant financial year. Hence non filer for
set-off is not allowable to him on such complete year
purchases as per section 48(5)
Tax Credit from composition The dealer has claimed tax The dealers ITC claim cannot be allowed if his The revenue risk is
dealers credits from suppliers who are supplier is filing returns in form 232 only & not the ITC claimed on
6 composition dealers filing returns in other return form types (i.e. his supplier has purchases from
in Form 232 and not in Form 231 opted for a composition scheme) for the related composition dealer.
/ 233 / 234 / 235. financial year.
 Risk parameter for Explanation Detail Explanation of Parameter Revenue Risk
Sr No 2009-10 & 2010-11

Tax Credit from works The dealer has claimed tax credits from The dealers ITC claim cannot be The revenue risk is the
contract composition suppliers who are 5% composition dealers allowed if his supplier is works wrong ITC claimed on
dealers under 5% (Civil Contractors) filing returns in Form contractor filing returns in form 233 purchases from works
7 scheme 233 and not in Form 231. 7 paying tax @5% (i.e. his supplier contractor under 5%
has opted a composition scheme for composition.
Civil contractor) for the related
financial year and property
transferred to buyer is immovable.
Excess ITC in J2 Tax credit claimed in annexure J2 from a The dealer has claimed set-off on Revenue risk is Tax
compared with full J1 supplier whose annexure J1 does not purchases from M/s. X, whereas credit in Annexure J2
of suppliers (Dealer show tax collection from such buyer. M/s. X is not disclosing sales to this where buyer is not
matching but other TIN There is no remaining total in annexure dealer in his J1. (It is important to reflected in annexure J1
8 unmatch) J1 of supplier and the supplier has filed note that, M/s. X has shown all his of supplier.
complete J1 as confirmed from taxable dealerwise taxable sales as per form
sales shown in schedules of Form 704. 704 schedules in his J1 Annexure)
Consistency in previous and subsequent
years is to be checked for year end
effects.
Excess ITC in J2 J1-J2 Mismatch. Tax credit claimed in The dealer has claimed set-off on Revenue risk is
compared with full J1 annexure J2 from a supplier whose purchases from M/s. X, whereas difference of Tax credit
of others (Dealer annexure J1 does not show same M/s. X is showing less sales to this and Tax collection in
matching but tax amount of tax collection from such dealer in his J1. (It is important to Annexure J2 and J1 of
mismatch) buyer. There is no remaining total in note that, M/s. X has shown all his buyer and seller
9 annexure J1 of supplier and the supplier dealerwise taxable sales as per form respectively.
has filed complete J1 as confirmed from 704 schedules in his J1 Annexure)
taxable sales shown in schedule of Form
704. Consistency in previous and
subsequent years is to be checked for
year end effects.
MVAT Asked to pay A1 - Accepted A2 - Not Accepted The revenue risk is the
10 asked to pay MVAT
amount.
CST Asked to pay A1 - Accepted A2 - Not Accepted The revenue risk is the
11 asked to pay CST
amount.
CST declarations not The list of not received forms is to be The revenue risk is the
Sr.no
. Parameter No.of Cases Tax Risk involved

1Tax credit from wrong TIN 5439 347179422

Tax Credit From Hawala (Beneficiary of
2 Hawala) 22661 4591656206
2A J1 Beneficiary tax 319 72548114
3Non Filer Beneficiary 4745 100898058
4Tax Credit From RCC 14989 742913924
5Wrong ITC from Composition dealer 7835 71988192
6Tax Credit From Return Defaulter 14646 445170046
7Excess credits in J2 with others J1 59543 16088618331
8J4 J3 Negative mismatch (Excess ITC) 2501 169212880
9Sales Suppression J2 Rev 39812 14956511221
10Asked to pay amount MVAT 44079 4720382440
11Asked to pay amount CST 17415 4881312782
12CST Declaration Tax 29494 45934285646
13Form C excess Value 16378 7424282205
14Form F excess Value 2088 5724687409
Total Unique 149612 106271646876
 12 parameterwise total risk
No. of 2009-10 No. of 2010-11
cases cases
Total no of cases 104554 105097
1_TaxCreditFromHawala_Beneficiaryo
fHawala 26011 5795590048 21777 4994997253
2_TaxshowninJ1ofHawala 1835 396254734 945 361146841
3_TaxcreditfromFakeTIN 1706 64771216 1514 96284547
4_TaxCreditFromRCC 16671 918307554 17373 1296640825
5_TaxCreditFromReturnDefaulter 14940 505954584 29164 1206511079
6_WrongITCfromCompositiondealer 6701 76289647 6810 89912258
7_TaxcreditfromCivilContractor 663 242318961 9491 906085363

8_ExcessITCfromfullJ1filers_Unmatch 5530 3567021322 12299 2468650518

9_ExcessITCfromfullJ1filers_Mismatch 9317 1758739484 8326 2096001167

10_Askedtopayamount_MVAT 46952 7157621408 41927 7729014474
1807414409
11_Askedtopayamount_CST 16374 13085245933 16807 6
9545181379
 Tinxsys

Economic Intelligence Unit MSTD 24

 1. Analyze data on TINXSYS and compare with State data like CRO,
Returns and E-704
2. Interaction with other state for purpose of verification of Inter
state transactions against declaration
3. Comparison of Inter state purchase and sales made by state
dealers with e-704 data and e-Return data
4. Analysis on Entry Tax

Economic Intelligence Unit MSTD 25

 360 Degree Analysis
Unit

Economic Intelligence Unit MSTD 26

 Data Exchange System (CBEC/CBDT/MSTD)
360 Degree Pilot

MSTD
Upload of data

Central
Excise
360 o
Platform
Customs
Data CBEC Warehouse

Download of
MIS Reports
Income
Tax Dept

Service
Tax
Economic Intelligence Unit MSTD 27
A Project by- Department of Revenue,
Government
of India.
Managed by- DG Systems (CBEC)
Partner departments:
1. Income Tax (CBDT)
2. Customs (CBEC)
3. Central Excise (CBEC)
4. Service Tax (CBEC)
5. Maharashtra Sales Tax Department
1. To compare custom data of imports with imports
disclosed at MSTD and identify potential tax evasion
cases
2. To compare custom data of imports with MSTD data
and identify the importers who are not filing VAT
return
3. To verify details of PANs of builders & developers
received from IGR department and identify potential
URD PANs and their registration details.
4. To identify potential tax evasion by the dealers who
have not filed form 704 neither are reflected in
annexure J1 and J2 for consecutive three years.
5. To find out the potential tax evasion by the dealers
who are registered as builders/developers.
  360 Data

1. Report no 12, i e , monthly Customs Clearance

Report
2. Report no 15, i e , Customs Imports vs VAT
3. Report no 19, i e YOY Growth Report
4. Report no 21, ie , Monthly Customs Clearance
Report CTH Wise
5. Report no 2, i e , Registration 360 Details
6. Report No 16, i e ITR vs VAT
 MSTD Data

1. Registration Data
2. Returns data
3. E-704 Audit Report
4. 704 Non transacting TIN list obtained from 704 cell
5. E-Payment Data

 Other Sources
1. IGR data ( Registration and stamp Duty )
1. Comparing CBDT & CBEC return data (Imports , ITR,
Service Tax and Central Excise ) with MSTD return data
2. Co-relation in data across various departments
established with PAN as key identifier
3. Cases are selected for BA, IBA or INV after applying
filters such as-
1. Business nature (Manu. Reseller, etc)
2. Commodities (Risky, Taxable, Tax free)
3. Business Name/Constitution
4. Import difference (Customs & MSTD)
5. Import difference percentage
6. Reason of registration (VRS, TO Exceed)
7. Age of RC
8. Location ( Mumbai region or rest of state or OMS)
9. Involvement in other Issues/Units data.
10. End use of the Commodity
• DGFT website provides e-BRC data on PAN search
• BRCs from 17/08/2012 available in electronic form
• MSTD signed MOU with DGFT on 18th Apr 2013 for exchange
of eBRC Data
• MOU enabled MSTD to access PAN linked eBRC data of DGFT
• eBRC Data will help MSTD to verify genuineness of exports
claims
• MSTD Dealers have shown exports claim of Rs 310139 Cr in
26146 cases for the F Y 2012-13
• Verification access may be given to certain functional
branches of MSTD
• Currently EIU is analysing export claims of LTU dealers for F
Y 2012-13.
 Commodity
Analysis Unit

Economic Intelligence Unit MSTD 34

 • To have a better insight of the trends occurring in a particular
commodity group and to give inputs to other EIU units for analysing
the dealers in a particular sector.

• Gap Analysis: Market Vs Internal data. Market trend Analysis.

• LTU Commodity analysis extrapolated to NON LTU dealers

• Total gross receipts for year ending 31/03/2013 was Rs. 65,702 Crore,
of which the contribution of selected EIU dealers was Rs 49045.49
Crores accounting to nearly 74.65% of the total receipts.

Economic Intelligence Unit MSTD 35

 Top ten Commodity Groups in terms of tax Receipts other than “MOTOR
SPIRITS/LIQUOR” which are the major contributors accounting for nearly 41% of the
total
COMMODITY GROUPS DEALERS GTOS (IN CR) NTTOS (IN CR) GTO CST TOTAL TAX PERCENTAGE
PAID UNDER CONTRIBUTION IN
ACT VAT+CST TOTAL FOR 2012-13
(IN CR)

AUTOMOBILE-SPARES, COMPONENTS, ACCESSORIES 889 83349.63 52137.85 22868.85 3286.14 11.41

AUTOMOBILES 454 160587.18 56682.88 90788.04 2650.52 9.21

FERROUS METAL 1062 199317.83 132676.69 54835.83 2398.40 8.33

BUILDING MATERIALS 533 36676.31 22432.25 8939.33 1760.61 6.12

CONSUMER DURABLES 261 38828.37 16412.77 16711.95 1264.20 4.39

CHEMICAL 714 75045.96 27382.95 44233.67 1103.12 3.83

PETROLEUM PRODUCTS 290 45160.01 24419.18 16352.20 1082.61 3.76

FMCG 434 43012.51 28148.72 9111.65 1012.79 3.53

ELECTRICAL GOODS 570 48367.02 16839.33 27430.08 907.51 3.15

CIGARETTE AND TOBACCO 122 11324.30 5991.33 2920.21 796.43 2.77

TOTAL OF TOP 10 COMMODITY GROUP 5329 741669.12 383123.94 294191.82 16262.33 33.16

REST OF COMMODITY GROUP 9006 989060.95 428808.44 413808.74 12526.44 25.54

A.MOTOR SPIRITS(PETROL,DIESEL & ATF) 6 208858.92 118506.73 70238.47 16500.34 33.64

B.LIQUOR 477 45771.27 17354.47 2922.92 3756.39 7.66

TOTAL FOR SELECTED EIU DEALERS 14818 1985360.27 947793.58 781161.94 49045.49 78.13

TOTAL FOR ALL DEALERS 2934111.74 1366951.94 1012850.17 62776.87

% CONTRIBUTION FOR SELECTED DEALERS IN TOTAL 67.66 69.34 77.13 78.13

SOURCE:RETURN DATA AND E PAYMENT DATA

Economic Intelligence Unit MSTD 36
ITEM 2012-13 2011-12 2010-11
EIU TOTAL % EIU TOTAL % EIU TOTAL %
SELECTED DEALER SELECTED DEALER SELECTED DEALER
DEALER DEALER DEALER
14501 14501 14501
GTO VAT 1998385.4 2605650.0
1961276.58 2934111.74 66.84 3061804.08 65.27 1676354.64 64.34
7 0
BRANCH TRANSFER 22136.65 25054.3 88.35 19176.83 22424.19 85.52 20575.25 23565.10 87.31
SALES U/S 8(1) 757134.96 993956.79 76.17 787598.85 1033593.88 76.20 642921.45 856831.00 75.03
TURNOVER OF EXPORT U/S 5(1)&5(3) 204718.61 310139.05 66.01 201084.34 309270.41 65.02 168555.13 259859.00 64.86
TURNOVER OF IMPORT U/S 5(2) 18691.48 22851.13 81.80 40335.41 44912.17 89.81 21920.01 25172.40 87.08
NET TURNOVER SALES LIABLE TO TAX 1203900.0
931938.82 1366951.94 68.18 939521.88 1396392.06 67.28 804086.43 66.79
0
GROSS TURNOVER OF PURCHASES 1606620.2 2113800.0
1507520.28 2324417.93 64.86 2512978.37 63.93 1336921.55 63.25
6 0
IMPORT PURCHASE(DIRECT) 47846.08 53045.7 90.20 63481.93 68736.33 92.36 49195.33 53635.00 91.72
IMPORT PURCHASE(HIGH SEAS) 239730.77 285849.62 83.87 281472.00 334097.53 84.25 204135.60 242977.00 84.01
INTERSTATE PURCHASE 201064.51 307574.14 65.37 222036.62 340144.3 65.28 197042.47 310031.00 63.56
INTERSTATE BRANCH
193008.74 236993.09 81.44 200180.11 237645.41 84.23 166637.37 207261.00 80.40
TRANSFER(PURCHASE)
SET OFF AVAILABLE 38098.72 58745.38 64.85 39114.59 62112.71 62.97 37202.84 58431.00 63.67
SALES TAX PAYABLE 75603.60 101747.7 74.30 75147.78 103758.64 72.43 66068.53 92478.80 71.44
EXCESS CREDIT CLAIMED AS REFUND 5962.91 6997.18 85.22 6481.37 7594.89 85.34 6795.45 8277.40 82.10
VAT AMOUNT PAID AS PER RETURN 45304.23 46805.5 96.79 41607.74 47453.78 87.68 34010.74 40281.90 84.43
GTO CST 776348.81 1012850.17 76.65 791181.20 1037223.33 76.28 644376.39 858156.13 75.09
CST AMOUNT PAID AS PER RETURN 2992.33 3451.48 86.70 2898.00 3405.76 85.09 2624.52 3170.00 82.79
Economic Intelligence Unit MSTD 37
 Dealer Profiling Unit
(Star Rating)

Economic Intelligence Unit MSTD 38

 It is performance of a Dealer based on selected
18 parameters
 Performance is judged on the basis of past 3-4
years depending upon parameters.
 According to positive/negative/under
performance, score is given to every dealer
 Based on Score dealers are rated from +5 STAR
to -5 STAR.
Criteria for Star Rating

Sr Parameter Marks Parameter Marks

No.
1 Registration /RC +10 Advisory rating poor + ret. (-6)
canc. mstd (-10) Non filer
2 Return filers 40 Investigation dues (-2.5)
3 Return Non-filer (-15) Inv. dues (-2.5)
4 Return short filers (-20/+20) Risky Commodities-location (-2)

5 E-704 filer (+30) Risky Commodities(Non-Ltu (-2)

+tax <10L)
6 Turnover if zero (-20) Hawala dealers -5 star

7 Tax >Rs 1Cr 20 Purchases from RC Canc. (-9)

dealers +ITC>25000)
8 Advisory rating (-7) Beneficiaries of Return (-9)
poor nonfiler
9 Advisory rating (-6) hawala beneficiaries (wrong (-9)
poor +Rc ITC>25000
Cancelled

40
Distribution of Dealers by STAR_RATING
Total :8,14,458 Active: 6,94,254 (+ve Star 32% -ve Star 68% )
NO.OF
SR.NO. STAR_RATING MARKS
DEALERS
1 5_STAR >=96 To <120 3,828
2 4_STAR >=72 To <96 82,965
3 3_STAR >=48 To <72 1,33,800
4 2_STAR >=24 To <48 42,479
5 1_STAR >=0 To <24 6
6 -1_STAR >=-24 5,50,029
7 -2_STAR -24 To -48 0
8 -3_STAR -48 To -72 0
9 -4_STAR -72 To -96 0
10 -5_STAR -96 To -120 1,351
The dealers having marks >=0 for all parameters will be treated as +ve Star rated
and dealers having marks <0 for any one or more parameters will
be –ve Star rated dealers.
 Registration Data : No of dealers by Business Type/Business
Nature/RC cancelled etc.

 Return Data: GTO-S/Inter State Sale/Exports/Sale while

Export/NTTO/GTO-P/Direct Imports/High Seas Import/Inter State
Purchase/Purchase within State/Tax Paid/Sale of Tax free Goods.

 E-704 Date: GTO-S/Inter State Sale/Export/NTTO/Direct

Imports/GTO-P/Tax Paid etc.

 Commodity Analysis: Commodity groups-No of

Dealers/GTO-S /Tax Paid
 Data Management
and Feedback
Analysis Unit

Economic Intelligence Unit MSTD 43

 • Allocation of cases to various functional units.
• Maintaining a database of cases allocated to different functional
divisions.
• Getting the feedback from various functional divisions in time-
bound manner.
• Generating analytical reports for higher authorities as an aid to
policy formulation and monitoring.

Economic Intelligence Unit MSTD 44

 • Feedback data is being used for corrective action in further analysis.
• Overall monitoring of actual revenue outcomes as a result of EIU
inputs
• This monitoring helps in better performance of functional divisions
along with EIU.
• Generating performance reports for EIU unit

Economic Intelligence Unit MSTD 45

 Cyber Forensic Lab

Economic Intelligence Unit MSTD 46

 • Over the last few years, extent of computerization across dealer
segments has increased exponentially.
• Also there is increase in mobile & email communications for
business.
• Earlier books of account in paper format are mostly replaced by
documents in digital form which are easy to modify, alter delete or
hide.
• In cyber lab the deleted, hidden, password protected data is
retrieved and analyzed, along with the SMS and email analysis.
• We also ensure the evidentiary value and integrity of the digital
data to be produced in the court of law to safeguard the
government revenue.
• This acts as a deterrent among the tax evaders.

Economic Intelligence Unit MSTD 47

 • EnCase Forensic
• FTK
• Tableau TD2
• Tableau TD35
• Intella
• Paraben
• Stegosuite
• Encase portable
• Data Safe line

Economic Intelligence Unit MSTD 48

 Business Intelligence
and Data Warehouse

Economic Intelligence Unit MSTD 49

 BI / DW will help in analysis of internal and external data
transactional data to:

• Expansion of the taxpayer base and to prevent revenue leakages /

tax evasion

• Create revenue forecast models to set targets for revenue

collection

• Provide decision support to MSTD

• Data mining

Economic Intelligence Unit MSTD 50

  BI Techniques:
 Cluster analysis - e.g. Hawalas, specific commodity, demography
 Market basket analysis - e.g. High revenue, low revenue yield cases identification
 Optimization - effort optimisation
 Time Series-patterns of tax payments, return filing/refunds claimed on a time scale
 Predictive/ Regression analysis
 Output:
 Standard Reports
 Ad-hoc Queries and Ad hoc Reports
 Detection of Patterns through Data Mining
 Generate forecasts of revenue
 Identification of circular trading, multiple stage hawala, suppression of turnover,
frauds, tax rate/commodity mismatches

Economic Intelligence Unit MSTD 51

  Project team:
 Consultants: Ernst & Young
 System Integrator: Capgemini India Pvt Ltd
 Business Requirement and System Requirement
documentation in progress; Development initiated
 Time Lines: Project to be completed by year end.

Economic Intelligence Unit MSTD 52

 1. E704 15. TINXSYS 29. Border Check Post
2. Registration 16. Tribunal 30. BST Divisions
3. Advisory 17. Admin / Web Portal 31. Dealer Profile
4. Internal Audit 18. Training 32. Returns
5. Recovery 19. Establishment 33. Grievances
6. e-payment 20. LAQ 34. Rewards
7. Incentive 21. Enforcement 35. KKPI
8. Appeal 22. EIU 36. 360 Degrees
9. Forms Control / CRO 23. Case Transfer 37. Legal
10. Profession Tax 24. Commodity Analysis 38. Assessment
11. Survey 25. DAS 39. Commissioner’s Office
12. Allied Acts 26. Issue Based Audit 40. Business Audit
13. LTU 27. Cross Check 41. Refund
14. Complaints 28. Act & Rule 42. GST

Economic Intelligence Unit MSTD 53

 • Revenue: Entertainment Tax
• Service tax • Statistics
• Income tax • CMIE
• Central Excise • SRDH (AADHAR)
• TINXSYS • Koshwahini
• MCA
• MCGM: Octroi
• MCGM: Shops & Establishment • Border Check Post
• Stamp Duty • Bank a/c data from FIU
• State Excise • Bank data from Banks
• RTO • Indian Medical Association
• Advocate Bar Council
• Medical Council

Economic Intelligence Unit MSTD 54

55
 Name of the Issue Date of No. of Cases
Submission

Prioritisation of visits Pending by Advisory 15-12-2011 1704

One PAN having Multiple TINs 24-02-2012 97

Revised Return Analysis_March11_March12 30-11-2012 107

PSI Cases 03-04-2010 25

Risky dealers Analysis_2010_11 26-06-2012 1280

Small TO analysis (2008-09) 21-01-2011 378

Economic Intelligence Unit MSTD 56

Sr Particulars Period No of Disputed
No Cases TO (Rs Cr)
1 Import Discrepancy 2008-09 750 325
2 Import Discrepancy 2009-10 101 152
3 Import Discrepancy 2010-11 423 250
4 Import Discrepancy 2010-11 126 34
(Specific Commodities)
5 Dealers not touched in 704 2009-10 189 69
6 Return defaulter importers 2008-09 432 154
7 Return defaulter importers 2009-10 839 162
8 Return defaulter importers 2010-11 1468 240
 Issues Quantum of 360 No of Cases Suspected/ Actions
data used Identified Doubtful TO Proposes/Results
(Rs. Cr.)

Importers not Customs data of Return follow up

Filing VAT 15331
Returns (2008- importers 432 3903
09)
Importers not Customs data of Return follow up
Filing VAT 55293
Returns (2009- importers 839 1511
10)
Importers not Customs data of Imports of Rs 313
Filing VAT 51619 Crores with Tax
Returns (2010- importers of Rs 22.14
11) 1468 900 Crores disclosed
in Returns Follow
up

Economic Intelligence Unit MSTD 58

Sr Particulars Period No of Disputed
No Cases TO (Rs Cr)
1 Import Discrepancy 2008-09 750 325
2 Import Discrepancy 2009-10 101 152
3 Import Discrepancy 2010-11 423 250
4 Import Discrepancy 2010-11 126 34
(Specific Commodities)
5 Dealers not touched in 704 2009-10 189 69
6 Return defaulter importers 2008-09 432 154
7 Return defaulter importers 2009-10 839 162
8 Return defaulter importers 2010-11 1468 240
Sr No Particulars No of
cases
1 Incorrect import disclosed in return not 36
resulting in tax
2 Action going on 257

3 Discrepancy related to tax evasion correct 32

4 No discrepancy found 13

5 Dealer not responding 139

6 Needs reanalysis 42

Total 519
 Sr. Division Mumbai Mofussil
No. Number Tax Credit Number Tax Credit (Cr)
(Cr)
1 Investigation 240 217.08 336 132.17
2 Advisory 111 9.71
3 Return 120 24.67
4 Survey 258 129.15
5 e-704 Cell 152 38.40
6 Others Mofussil 85 6.75
RCC Moffusil 160 64.10
881 419.01 581 203.02

Economic Intelligence Unit MSTD 61

 BACK

Sr. Division Mumbai Mofussil

No. Number Tax Credit Number Tax Credit
(Cr) (Cr)
1 Investigation 240 217.08 336 132.17
2 Advisory 111 9.71
3 Return 120 24.67
4 Survey 258 129.15
5 e-704 Cell 152 38.40
6 Others Mofussil 85 6.75
RCC Moffusil 160 64.10

881 419.01 581 203.02

 Factors influencing taxpayer behaviour

Attitude to compliance Compliance strategy 10

9
Have decided not to comply Use the full force of law
Business Industry 8
7
Don’t want to
but will if we pay attention Deter by detection 6
Taxpayer Our
5
4
Sociological Economic Try to but don’t
strategies
3
Always succeed aim to create Assist to comply
2
Psychological pressure
1
Willing to do down
the right thing Make it easy

Figure : Factors influencing taxpayer behaviour and compliance Pyramid

Source: Adapted from Guidance Note on ‘Compliance Risk Management: Managing and Improving Tax Compliance’: Forum on Tax Administration,
Centre for Tax Policy and Administration, October 2004.