The road check-post, loathed by trade and industry as a point of corruption and a cause for the delay in the movement of goods, is now getting the grudging admiration from the same sections that have for long cursed it. The general consensus in industry is that the implementation of e-Sugam, an acronym for Simple Uploading of Goods Arrivals and Movements, since June 2010, for the transport of goods across the State, has made the system less prone to abuse.
The online system, implemented by the State Commercial Taxes Department, in association with the National Informatics Centre, requires registered dealers to submit details of every consignment valued at more than Rs. 20,000. Upon filing the application, each consignment is provided a unique number, which has to be produced at the check-post. Pradeep Singh Kharola, Commissioner, Commercial Taxes, says entries can be accessed from any of the more than 70 stationary and mobile check posts across the State.
Transparent and accountable
Every day, more than 70,000 e-Sugam numbers are being generated. “e-Sugam has made the system more transparent and accountable,” Mr. Kharola observed recently at a meeting organised by the Karnataka Small-Scale Industries Association (KASSIA). Mr. Kharola said those accompanying the consignment need not even carry a printout of the online submission. “Nearly two tonnes of paper is being generated currently, we want to move towards a completely paperless system,” he said.
“e-Sugam is really sugama (convenient) for trade and industry, but it needs to be fine-tuned,” says B.T. Manohar, Chairman, State Taxes Committee of the Federation of Karnataka Chambers of Commerce and Industry. Mr. Manohar, who is also member of the State Advisory Board of the Value Added Tax, said the system is skewed against smaller units. A notification issued by the Commercial Taxes Department on December 23, 2011 listed 29 classes of commodities that would mandatorily require e-Sugam compliance.
Small units' concerns
Many of these units run by small entrepreneurs lack the technical competence and economic scale to reap the full benefits of compliance with the e-Sugam system, Prakash N. Raikar, KASSIA president, told The Hindu. Mr. Raikar said the minimum threshold beyond which e-Sugam is mandatory be raised from Rs. 20,000 per consignment to Rs. 1 lakh. Those running “tiny” units, each with an annual turnover of less than Rs. 1 lakh, ought to be exempted from the scheme, he said. “Many of these people are of working class origin, first-time entrepreneurs who are non-literate and with little computer skills,” he pointed out.
Many do not even have a computer, let alone a broadband connection to make online submissions, he observed. He suggested that the list of items be restricted to those the Department identifies as being particularly prone to tax evasion.
Linkage to VAT
Mr. Raikar said the system, in its current form, does not provide any “incentives” to users. Observing that since the VAT system requires a trail (in electronic form or on paper), he asks: “Does the Department have an action plan to link the e-Sugam system to invoices and the VAT refunds?”
Refunds currently take nearly two years to materialise, he said. “Small units, which are starved of working capital, find this killing,” he remarked.
Mr. Manohar said although the system has been a “game changer,” it needs modifications. The Department's servers need to be upgraded so that they can “cope with the load.” In some districts of the State the e-Sugam system remains unavailable, he pointed out.
The validity of the e-Sugam number is only ten days, which is unsuitable for the transport of goods over long distances, he observed. “A consignment from Kolkata to Bangalore can sometimes take 15 days, by which time the validity of the e-Sugam receipt lapses. The system is also unsuitable for the transport of goods in small lots”, he added.
Considering that the e-Sugam system is “mission critical”, it ought to be backed by a helpline that works round the clock and throughout the year, Mr. Manohar said. “Helplines in each district must be manned by technically qualified personnel who can help users,” he suggested.
