E-PERMIT
COMMERCIAL TAX DEPARTMENT, GUJARAT STATE,INDIA

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
The Gujarat VAT Act mandates that all goods entering, leaving or passing through the state were required to be accompanied by a declaration in forms 402,403 and 405. Originally to be obtained from the offices of the department or bought. Subsequently, these forms were made available online. However, each form so generated had to be validated at the check post manually by stamping the form. This led to a great amount of time being spent at the check post by vehicles carrying goods. There was also a lot of scope for rent seeking by officers of the Department which led to honest dealers being harassed with unnecessary checking, etc. Moreover, one of the main purposes of the checkpost is of data collection was also not being served because the forms were manually stamped and in such large numbers that the huge data could not be entered into the VAT MIS. After extensive discussions with stakeholders this system was sought to be overhauled and was introduced in stages from December 22, 2014.

B. Strategic Approach

 2. What was the solution?
E-Permit is a system that allows persons to generate statutory forms for use during transportation of goods to, from or through the state of Gujarat. In this online or through SMS at any time of day or night. It also provides such persons with alerts on the movement of goods through the checkpost. It has introduced the process of online validation of such form at the checkpost and done away with the requirement of submitting physical forms at barriers. Finally it has overhauled the system of inspection by introducing random, system selected vehicles of inspection and reduced the number of such inspections. Overall it has resulted in the reduction of logistics costs at the checkpost.

 3. How did the initiative solve the problem and improve people’s lives?
Forms or rather a unique id number identifying the forms are available online or through sms to dealers as well as to any other person requiring such forms. This facility is now available 24 X 7. In the year 2015-16, a total of 2.58 crore forms were generated on this system. This is used not only by dealers and transporters of Gujarat but by people from all over the country. Around 6.28 lakh people (dealers, transporters, etc.) have taken the benefit of this system. At the check post only this unique id is to be given (the hard copy of the form is not required) and the forms are opened by the officers on their computers/ tablets wherein all details filled online by the concerned person are visible to the officer on his or her device. This unique generated form number can be communicated anytime to the driver of the vehicle carrying goods prior to the entry at the check post. These forms are now validated online only. The time taken for online validation is between 15 to 25 seconds only as opposed to an average of 5 to 10 minutes prior to the introduction of the system The check post officers do not decide which trucks are to be physically checked under this system. Which trucks will be examined physically at the check post is determined by an algorithm so that random unique numbers are picked for checking. Therefore, no one can predict in advance as to what trucks will be selected for checking. This was done to break the system for adjustment of certain trucks by paying bribes. The randomness was also put in place to create a transparent and fair system for honest dealers. This transparent system allowed the Department to reduce the numbers of trucks to be physically verified. Only around 0.5 to 1.0 per cent trucks are now physically checked at the barriers. That is another reason why transit time has improved considerably. This has resulted in huge savings in logistic costs for dealers and transporters in Gujarat –there is a reduction in demurrage charges and fuel expenses The dealers/transporters are informed of the trucks passing the check post through SMS so that they can track the movement of their goods. Total 3.19 Crore SMS sent during the year 2015-16. In 2016-17 (Upto January 2017) Tax Collection is 406.08 Crore. Customization of the system was done for corporate bodies, for job worker consignments, for trans-shipments and for multiple consignments to ensure no category of dealer faces hardship due to the special nature of their business. Multiple consignments can be validated at the single click of a mouse saving considerable time at the check post. Also the entry or exit in Gujarat can be made through any of a group of check posts and is not necessary to be made through a single declared check post. The data collection at the check post is much more robust and accurate and therefore it is easier to analyze data and identify tax evaders and tax defaulters thereby creating a level playing field for honest tax payers. Around 156 large cases of evasion have been identified in the year 2015-16 from data collected at the check post. Tax defaulters are actually keeping the tax collected from consumer’s i.e the general public with themselves. This system has helped the Department to actually collect such public monies and deposit them in the Government Treasury. Impact on Revenue Collection: Increase in tax revenue by 192% in 2015-16 in comparison to 2014-15. Tax collection was 239.25 Cr during the year 2014-15. It increased to 461.29 Cr during year 2015-16.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Forms or rather a unique id number identifying the forms are available online or through sms to dealers as well as to any other person requiring such forms. This facility is now available 24 X 7. In the year 2015-16, a total of 2.58 crore forms were generated on this system. This is used not only by dealers and transporters of Gujarat but by people from all over the country. Around 6.28 lakh people (dealers, transporters, etc.) have taken the benefit of this system. At the check post only this unique id is to be given (the hard copy of the form is not required) and the forms are opened by the officers on their computers/ tablets wherein all details filled online by the concerned person are visible to the officer on his or her device. This unique generated form number can be communicated anytime to the driver of the vehicle carrying goods prior to the entry at the check post These forms are now validated online only. The time taken for online validation is between 15 to 25 seconds only as opposed to an average of 5 to 10 minutes prior to the introduction of the system

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Gujarat Commercial Tax Department has implemented e-Permit system. A total of 2.58 crore forms were generated on this system. This is used not only by dealers and transporters of Gujarat but by people from all over the country. Around 6.28 lakh people (dealers, transporters, etc.) have taken the benefit of this system.
 6. How was the strategy implemented and what resources were mobilized?
E-Permit is a system that allows persons to generate statutory forms for use during transportation of goods to, from or through the state of Gujarat. In this online or through SMS at any time of day or night. It also provides such persons with alerts on the movement of goods through the checkpost. It has introduced the process of online validation of such form at the checkpost and done away with the requirement of submitting physical forms at barriers. Finally it has overhauled the system of inspection by introducing random, system selected vehicles of inspection and reduced the number of such inspections. Overall it has resulted in the reduction of logistics costs at the Checkpost. e-permit project has facilitated Taxpayer by users friendly tax services with least human interface and provided easy & user friendly access of the services even to the smallest dealer In the most remote area. It has provided better quality of information and data for decision making and strengthen internal audit and control for better Tax Management. The E-Permit project was started with the budgetary grant of Government of Gujarat.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
Officials of Commercial Tax Department, Member of Bar Associations, Member of Chamber of Commerce, Member of Transport Association where the stake holders involved in the design of the initiative and its implementation. Customization of the system was done for corporate bodies, for job worker consignments, for trans-shipments and for multiple consignments to ensure no category of dealer faces hardship due to the special nature of their business. Multiple consignments can be validated at the single click of a mouse saving considerable time at the check post.

 8. What were the most successful outputs and why was the initiative effective?
The time taken for online validation is between 15 to 25 seconds only as opposed to an average of 5 to 10 minutes prior to the introduction of the system Only around 0.5 to 1.0 per cent trucks are now physically checked at the barriers. That is another reason why transit time has improved considerably. This has resulted in huge savings in logistic costs for dealers and transporters in Gujarat –there is a reduction in demurrage charges and fuel expenses Around 156 large cases of evasion have been identified in the year 2015-16 from data collected at the check post. Tax defaulters are actually keeping the tax collected from consumers i.e the general public with themselves. This system has helped the Department to actually collect such public monies and deposit them in the Government Treasury. Impact on Revenue Collection: Increase in tax revenue by 192% in 2015-16 in comparison to 2014-15. Tax collection was 239.25 Cr during the year 2014-15. It increased to 461.29 Cr during year 2015-16. The dealers/transporters are informed of the trucks passing the check post through sms so that they can track the movement of their goods. Total 3.19 Crore SMS sent during the year 2015-16. Customization of the system was done for corporate bodies, for job worker consignments, for trans-shipments and for multiple consignments to ensure no category of dealer faces hardship due to the special nature of their business. Multiple consignments can be validated at the single click of a mouse saving considerable time at the check post. Also the entry or exit in Gujarat can be made through any of a group of check posts and is not necessary to be made through a single declared check post.

 9. What were the main obstacles encountered and how were they overcome?
E-Permit is a system that allows persons to generate statutory forms for use during transportation of goods to, from or through the state of Gujarat. In this online or through SMS at any time of day or night. It also provides such persons with alerts on the movement of goods through the checkpost. It has introduced the process of online validation of such form at the checkpost and done away with the requirement of submitting physical forms at barriers. Finally it has overhauled the system of inspection by introducing random, system selected vehicles of inspection and reduced the number of such inspections. Overall it has resulted in the reduction of logistics costs at the checkpost.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
Forms or rather a unique id number identifying the forms are available online or through sms to dealers as well as to any other person requiring such forms. This facility is now available 24 X 7. In the year 2015-16, a total of 2.58 crore forms were generated on this system. This is used not only by dealers and transporters of Gujarat but by people from all over the country. Around 6.28 lakh people (dealers, transporters, etc.) have taken the benefit of this system. At the check post only this unique id is to be given (the hard copy of the form is not required) and the forms are opened by the officers on their computers/ tablets wherein all details filled online by the concerned person are visible to the officer on his or her device. This unique generated form number can be communicated anytime to the driver of the vehicle carrying goods prior to the entry at the check post These forms are now validated online only. The time taken for online validation is between 15 to 25 seconds only as opposed to an average of 5 to 10 minutes prior to the introduction of the system The dealers/transporters are informed of the trucks passing the check post through sms so that they can track the movement of their goods. Total 3.19 Crore SMS sent during the year 2015-16. The data collection at the check post is much more robust and accurate and therefore it is easier to analyze data and identify tax evaders and tax defaulters thereby creating a level playing field for honest tax payers. Around 156 large cases of evasion have been identified in the year 2015-16 from data collected at the check post. Tax defaulters are actually keeping the tax collected from consumers i.e the general public with themselves. This system has helped the Department to actually collect such public monies and deposit them in the Government Treasury. Impact on Revenue Collection: Increase in tax revenue by 192% in 2015-16 in comparision to 2014-15. Tax collection was 239.25 Cr during the year 2014-15. It increased to 461.29 Cr during year 2015-16.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
Yes, this e-Permit functionality improve integrity and accountability in the process of goods movement from Gujarat to Other States and from other States to Gujarat and goods passing through Gujarat. The check post officers do not decide which trucks are to be physically checked under this system. Which trucks will be examined physically at the check post is determined by an algorithm so that random unique numbers are picked for checking. Therefore, no one can predict in advance as to what trucks will be selected for checking. This was done to break the system for adjustment of certain trucks by paying bribes. The randomness was also put in place to create a transparent and fair system for honest dealers. This transparent system allowed the Department to reduce the numbers of trucks to be physically verified. Only around 0.5 to 1.0 per cent trucks are now physically checked at the barriers. That is another reason why transit time has improved considerably. This has resulted in huge savings in logistic costs for dealers and transporters in Gujarat –there is a reduction in demurrage charges and fuel expenses

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Not Applicable

Contact Information

Institution Name:   COMMERCIAL TAX DEPARTMENT, GUJARAT STATE,INDIA
Institution Type:   Government Department  
Contact Person:   DR.P.D.VAGHELA,IAS VAGHELA
Title:   COMMISSIONER  
Telephone/ Fax:   079-26581929 FAX-079-26574612
Institution's / Project's Website:  
E-mail:   dcegov-ct@gujarat.gov.in  
Address:   C/5,RAJYA KAR BHAVAN,ASHARAM ROAD
Postal Code:   380009
City:   AHMEDABAD
State/Province:   Gujarat
Country:  

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