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Infosys to set up BPO unit for I-T dept

Infosys to set up BPO unit for I-T dept
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First Published: Fri, Jan 30 2009. 12 17 AM IST

Updated: Fri, Jan 30 2009. 12 16 AM IST
New Delhi: Infosys Technologies Ltd has been selected by the income-tax (I-T) department to set up a business process outsourcing (BPO) unit to carry out its routine work and give tax officials more time to focus on nabbing tax evaders.
Taxpayers, too, will benefit, with refunds issued within three months of a tax filing and a call centre established to handle taxpayer queries.
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“Today, value-creating jobs are being crowded out,” Ajai Singh, member of the Central Board of Direct Taxes (CBDT), the tax department’s top decision-making body, said. The BPO for tax work is the department’s solution to the problem.
Infosys will get paid Rs250 crore for the five-year contract, Singh said. Infosys did not immediately respond to Mint’s questions. The decision to outsource routine paperwork to Infosys has to be ratified by the Union cabinet. According to Singh, the cabinet is expected to decide soon. The first centralized processing centre (CPC)—the BPO unit—will be ready in Bangalore in about six months and the city’s taxpayers will be a part of the pilot project. Singh expects three-four more CPCs in other locations within the next two years.
The I-T department will provide space and Infosys will manage the rest—hardware, logistics to move scanned tax returns to CPC and software for data mining.
Even as direct tax collections from individuals and firms more than doubled in the three years to 31 March, the workload of tax officials has increased even more because of understaffing. The finance ministry estimated a 33% shortfall in assistant and deputy commissioners at the end of fiscal 2008.
According to Gaurav Taneja, partner at audit and consulting firm Ernst and Young, compliance work tends to get bunched up towards the end of the year. Consequently, “inadequate time is given at the end of the year (to taxpayers) to make submissions”, he said.
Taneja hoped the move to push low-end work to a CPC would eventually raise the quality of assessment orders handed out by tax officials.
The tax department received 27.3 million returns in 2007-09, a majority on paper. Companies, a tiny segment of India’s 32.6 million assessees, have to file returns online.
The processing of returns is handled primarily by I-T officers, assistant commissioners and deputy commissioners, who also handle compliance-related work such as scrutiny of returns.
CBDT’s Singh said, “80% of resources are spent on high-volume, low-knowledge jobs and 20% of resources are spent on scrutiny.”
In 2008, CBDT approved a plan to separate bulk operations involving repetitive work and compliance operations. The decision to outsource some tax work has raised questions on privacy and data security.
According to Singh, CPC would be manned by tax officials. Infosys staffers attached to the processing unit would not have more access to data than what exists during data- entry operations, he said. The existing mechanisms would be soon supplemented with an independent auditor constantly carrying out security audits, Singh added.
Filing tax returns is compulsory. There are questions on the legitimacy of allowing people outside the government access to a centralized database on tax payments.
According to legal experts, there is no legal restriction on the government using independent entities to manage sensitive data.
“There is no statute on personal privacy in India,” said Rahul Matthan, Bangalore-based partner at law firm Trilegal.
“There are fundamental rights cases that indicate that the government cannot violate personal privacy of its citizens and while there are no cases that specifically deal with it, this principle could be extended to say that government is bound to ensure basic security of personal information,” Matthan added.
Graphics by Ahmed Raza Khan / Mint
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First Published: Fri, Jan 30 2009. 12 17 AM IST