Uncovering the most egregious and pervasive cases of fraud and non-compliance

APCTD uses multi-source data points and SAS advanced analytics to detect fraud and recover funds

Andhra Pradesh Commercial Tax Department (APCTD) is the nodal agency for the administration and collection of various taxes in the State of Andhra Pradesh. This regulatory body is engaged day in and day out, in managing revenue regulation combined with best practises to run a progressive tax administrative system.

With an endeavour to transform itself into an enterprise friendly entity and a progressive tax administrative system, the department’s prime focus remains on bringing in greater transparency, fairness and firmness to achieve highest tax efficiency through the use of information technology.

Like every other government and public sector agency, APCTD was under pressure to perform faster and better with constrained resources. The department turned to solutions from SAS to improve business processes, detect fraudulent activities, track commodities, perform internal audits and keep a tab on business and dealers. These solutions essentially deal with better processing, aligning, administering and monitoring of information that flows in the department on a daily basis.

The nature and rate of fraud schemes are ever evolving. As such we needed solutions to detect evasions, non-compliance and ultimately protect our revenue streams. Advanced analytics solutions by SAS have helped us pinpoint evaders and uncover hidden links that indicate collusion for all major revenue sources. Syamala Rao IAS Chief Commissioner of State Taxes, Andhra Pradesh

Consistent, accurate, verifiable and up-to-date record of data:
APCTD uses solutions from SAS to correct, align, de-duplicate and verify accurate data. Data can now be taken data from multiple, disparate operational systems and then formatted, cleansed, transformed and stored in a central data warehouse, thus allowing standardization while updating or upgrading new information related to an existing or new entries.

User- friendly solutions that enable holistic view of tax payers and lead to better decisions:
Limited empirical methods made it hard to find the right individuals or businesses to audit. Using enterprise-grade and user friendly solutions from SAS, hidden complexities and relationships in the disparate data, could now be aligned and made sense of. A single, comprehensive view of data across departments, functions and agencies across more than 3 lakh cases is available. APCTD is now in a position to gather and validate more relevant, predictive and forward-looking data to better target tax gaps and make more accurate revenue projections.

Sophisticated analytics across key factors to spot potentially fraudulent claims:
APCTD’s collaboration with SAS successfully helped in identifying linkages among seemingly unrelated individuals, entities and activities with the unique network visualization interface. Collection and analysis of performance measurements across key important metrics like sale to purchase ratio, turnover versus returns etc. added further intelligence. The selection of audits is automated based on the possible cases identified by the analytics solution. Analytically risk profiling of the businesses based on various KPIs guides the department to drive focussed attention towards customers prone to commit fraud.

Fighting tax evasions and increasing compliance with advanced analytics:
The Commercial Taxes Department of Andhra Pradesh has started using SAS software to detect tax evasion in various forms and arrest the revenue leakages because of fraudulent dealer. Many dealers engage in various malpractices like engaging in circular trading, issuing invoices without exchange of goods and conducting business in the names of drivers, cooks, among the others.

SAS links all the data of various dealers in one place. The software examines the data given by a dealer in different formats at different times and highlights discrepancies. There is also a mechanism in place to integrate and analyse the data from other departments like public distribution system to identify possible cases of tax evasion. In the first phase, fraudulent transactions are detected and then the software further helps in identifying the dealers associated with such transactions. Using this data, the authorities plan to issue notices, initiate recovery and levy double penalty on the fraudulent dealers.

Challenge

  • Locating duplication in the dealer’s data
  • Detecting tax evasions resulting out of malpractices
  • Identifying Non Compliance of taxes and manipulation in liabilities by businesses/dealers

Solution

SAS® Fraud Framework
SAS® Visual Analytics
  

Benefits

  • Consistent, accurate, verifiable and up-to-date record of data
  • User- friendly solutions that enable holistic view of tax payers
  • Sophisticated analytics to spot potentially fraudulent claims
  • Increased compliance with advanced analytics
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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