TCS tops in VAT software sales to govts

AP to get 20% royalty on cost of base solution

The multi-crore IT consulting, services and business process outsourcing major has not only developed and implemented the software in eight states, but is also on the verge of concluding deals with five others.

The Andhra Pradesh government, incidentally, is the happiest with this development. For, with every other state that deploys this software based on the solution implemented in AP, the state government gets a royalty.

The Hyderabad centre of TCS has developed the software for Andhra Pradesh, Assam, Meghalaya, Manipur, Sikkim, Tripura, Nagaland and Mizoram. For the northeastern states, it has collaborated with its Kolkata centre in developing the software solution.

Besides TCS, the other players in this domain are CMC Limited, Crown Agents and Mastek Limited. While the UK-based Crown Agents has tied up with the Karnataka government in this regard, Delhi-based CMC Limited has deployed its software in Madhya Pradesh, Uttar Pradesh and Chattisgarh. In fact, TCS is also implementing the VAT software in Delhi with CMC Limited.

On the other hand, Mumbai-based Mastek Limited has tied up with governments in Maharashtra and Orissa for deployment of VAT software. The remaining states are either in negotiations with some companies in this regard or are managing it in-house.

Speaking to Business Standard, Rajesh Nambiar, regional head of TCS, said, "We have already deployed the software in eight states and are in the final stages of concluding deals with five others. The software for northeastern states was developed from the scratch, but for Assam and other states that we are in discussions with, AP's software will be the base. The government of Andhra Pradesh, therefore, will get a royalty of 20 per cent on the cost of the base solution when these states deploy the software." Nambiar, however, did not divulge the base solution cost of the software.

VAT was originally slated to be introduced in 2002. Although the company had readied the software at that time, it had to be modified later to suit the requirements that crept in during the three-year wait period.

Titled Value-Added Tax Information System (VATIS), the software helps the commercial taxes department to monitor tax collection. It has an in-built system that helps generation of annual debit credit balance for each dealer who is given a unique Taxpayer Identification Number (TIN).

Automatic updation of penalty and interest due is also facilitated. The commercial taxes department of the state government has already registered around 1,20,000 dealers through this system.

"There are many other states that are managing VAT administration in-house. We are also in talks with some of these states as we can offer better solutions. than what they can manage in-house. Any subsequent state that we tie up with in this regard will most likely have the tax solution based on the one deployed in AP," Nambiar said.