The Odisha finance department has urged the Union finance ministry to enable exchange of data between tax collection agencies of the Central and state government.
The move is expected to help check tax evasion and also improve tax compliance.
“A number of data fields in the returns submitted to different agencies are inter-related and hence it is possible to cross check and validate the authenticity of data provided by the dealers to different tax collection agencies. Sharing of data between the agencies of the Central and state government will thus assist in checking tax evasion and improving tax compliance,” J K Mohapatra, secretary (finance) wrote to Sumit Bose, secretary, department of revenue under Union finance ministry.
The Odisha government has progressively moved towards electronic filing. E-filing has been made mandatory for all TIN (tax identification number) dealers in the state with effect from April 1 this year. This has created a major opportunity for the commercial organization of the state government to analyse, cross check, verify and validate the data provided by the dealers with other sources of similar data available with other tax collection agencies of the central as well as state government.
It may be noted, the Maharashtra government’s commercial tax organisation has taken a pioneering initiative of cross verification of the data provided in the e-returns by the dealers with specific relevant data fields of the e-returns submitted by the same set of dealers to the income tax department and customs & excise department of the Centre.
The relevant data is transmitted to the coordinating server maintained by the Directorate of Systems of Central Board of Excise and Customs (CBEC).
Keen to emulate the Maharashtra government’s model, the Odisha finance department has requested the Union finance ministry to urge CBEC as well as Central Board of Direct Taxes (CBDT) to enable data exchange with the state's commercial tax organization.
“A state level coordination committee consisting of the chief commissioner (income tax), chief commissioner (central excise & customs) of the Odisha region and commercial tax commissioner of the state may be constituted for spearheading the proposal,” Mohapatra suggested.
In October last year, the special investigation team of the state government had unearthed cases of sales tax evasion to the tune of Rs 3,164 crore by nine big companies and 75 small and medium scale firms.
