The overall task includes reorienting functions, processes, people, technology and resources. Central to the designing exercise is an integrated ICT-enabled system that will standardize commercial tax administration across the country and foster a citizen-centric and business-friendly environment. In particular, M/s Ernst & Young were involved in:

1. Developing a strategy and a roadmap for the CT-MMP.
2. Designing an appropriate enterprise architecture
3. Making capacity building and change management plans
4. Presenting funding and resource options

The basic design principles for VAT were laid down in the White Paper on VAT published by the Empowered Committee of State Finance Ministers, but States and Union Territories have opted to implement VAT in accordance with local conditions. While sticking to the basic design, they have individually drafted varying sets of VAT Act, Rules and Business Procedures. This has resulted in lack of uniformity in the administration of VAT.

As commercial taxes form the most important revenue base for States and Union Territories, currently accounting for 60-70% of the total internal resources generated, certain quarters articulated the need for standardized commercial tax administration that would plug loopholes and a foster a citizen-centric dispensation aimed at better compliance.

The CT-MMP is a step in that direction. The Government of India's Department of Revenue, which triggered the project, is also implementing it through the good offices of NISG.

"To create a modern state tax administration that is Efficient, Effective and Equitable and which is conducive to investment, economic growth and free flow of goods and services within the common market of India."

The CT-MMP is aimed at creating nationwide infrastructure that would facilitate inter-state trade, ensure uniformity and standards in commercial tax administration, and enable free exchange of information. The emphasis will be on using ICT to improve the delivery of public service and strengthen the government's revenue base.

• The Department of Revenue, Ministry of Finance, Government of India
• Commercial Tax Department of the States/UTs
• Finance Department of the States/UTs
• Dealers and vendors
• Legal Department

• e-governance initiatives to enhance service delivery
• re-organization of tax departments along functional lines
• enhanced revenue forecasting capabilities
• industry-based classification of dealers
• faster processing of VAT refunds using a risk-based approach
• visibility to dealer ledger
• enhanced TINXSYS for online tracking of inter-state trade

Once implemented, the services to be provided under the CT-MMP from the standpoint of the taxpayer include:

• Registration of dealers
• Collection of returns
• Collection of taxes
• Provision of refunds
• Tax accounting services
• Issue of forms pertaining to inter-state trade
• Information services, taxpayer education and guidance

The key considerations that were to serve as guiding principles were:
Focus on core business processes that are to be reengineered with a service-oriented approach so that there is transformation in commercial tax departments.

1. Look at uniform architecture and standards that can be harmonized with differing levels of ICT initiatives taken in States and UTs.
2. Come up with a change management strategy that will address possible resistance in the commercial tax departments and existing business-unfriendly atmosphere.
3. Propose a business model that will enable public-private partnerships to fund a part of the estimated Rs 750 crore required to modernize the commercial tax department across the country, with public investment accounting for the remainder.
4. Bridge gaps in individual and institutional capacities through appropriate training programs and sensitization seminars targeting various stakeholders.

As per the terms of reference, the consultants studied the commercial tax systems of Delhi, Andhra Pradesh, West Bengal and Gujarat.

Following the study, the consultants came out with the following specific work products.

• Roadmap for implementing the CT-MMP, with emphasis on vision, mission, service prioritization, program management and governance structure & mechanisms, stakeholder expectations, risks and risk management guidelines, and critical success factors.
• International/national best practices along with their applicability and usability in the context of CT-MMP - best practices for program management, governance, processes for management of commercial tax functions, technology architecture, service delivery, service delivery standards and channels for service delivery.
• Portfolio of services to be targeted under the CT-MMP - with description, breadth, depth, prioritization and service levels required to be achieved to meet stakeholder expectations.
• Reengineered processes - process descriptions, process metrics, expected impacts of these processes on stakeholders and on internal efficiencies, challenges in implementing them, governance structure for implementation and how the implementation plan has to be tied with IT infrastructure/applications.

In their reports, the consultants made certain recommendations for implementing the CT-MMP. A workshop involving Commissioners /Deputy Commissioners of the States was held in May 2007 to introduce them to the recommendations.

NISG has sent communication to States and UTs exhorting them to implement the recommendations of the study and take NISG's assistance if required.