Wednesday, November 23, 2011

Experiences at the USA

The one week training here at the USA comprised academic sessions of high quality by different experts – an Internal Revenue Service Officer; economists, accountants, professors of the Kennesaw State University, lawyers and tax practitioners from various law firms.

The first day started with a very interesting session on viewing taxation from the perspective of Game Theory. The professor drew conclusions from the perspective of a taxpayer who has the option to decide between paying and not paying the correct tax while the tax administration has to decide between auditing a case and not auditing a case. This situation was shown to be a partial equilibrium wherein no one decision is better than the others. Hence, a probabilistic solution has to be given to this problem and the solution, which is the probability with which the taxpayer will cheat and the IRS will audit, will depend of factors like the cost of audit to the taxpayer, the penalty to taxpayer for cheating and the amount of tax owned to the state. Other important sessions on the same day were an overview of the principles of international tax treaties and transfer pricing with specific reference to the USA, an overview of the state and local taxes in the USA, the IRS whistleblower program.

Another very important session was an overview of the tax administration in the USA by Ms. Karen Russel, an Internal Revenue Service officer. She spoke in detail about the correspondance examination during the tax audit (similar to assessment proceedings in India) and the different third party sources from which information is gathered for assessment. The privacy laws are strict in the US and information flows only on a “need to know” basis among the IRS officers. She also pointed out various think tanks like the Tax Foundation, the Citizens for Tax Justice, the Center on Budget and Policy Priorities, in the area of tax policies who raise their voices by submitting reports to the Congress based on the detailed tax statistics released meticulously by the Statistics division of the IRS. We learnt that the US tax code i.e. the Code of Federal Regulations is even more detailed and complex than ours – the US income tax laws come in five voluminous books, with the total number of sections exceeding one thousand.

Almost whenever a systemic improvement is intended, we make references to the similar state of affairs in the USA. Before going to the USA, we had a theoretical understanding of the USA and its economy, people and culture but this visit to Atlanta gave us a closer peep into the actual state of affairs. Now, whenever in future, somebody makes comparisons with the US, we will have a better context and would be in a position to visualize the picture better thereby making us more capable of taking good decisions. The one-week training at Atlanta has definitely broadened my perspective.


Submitted by:-
Vikram Pagaria,
Officer Trainee, 64th Batch of IRS

Wednesday, November 16, 2011

During the one-week attachment here at the SARS (South African Revenue Service), i am extremely impressed by a visit at the Computer Forensics Laboratory. I am penning down my experiences below.

The highpoint for me during the attachment was a visit to the Computer Forensics Laboratory at the Large Business Center here at the SARS. The Computer Forensic Laboratory has five computer experts working who manage the entire operations for South Africa. Mr. Arvind Maharaj, a brilliant computer expert heads the laboratory. The high revenue tax-related cases which go to courts and possessing a detailed scrutiny of electronic evidence are referred to the Computer Forensic Laboratory.



The laboratory appeared to be small with only one big room and four small rooms but the discussion that followed consequently stumped us completely. We were shown the hugely powerful computers that the personnel here use for their operations. All the computers are custom-made, possessing 24 GB RAM, a 3.2 GHz quad core Intel processor and a hard disk of around 9 TB. We were then demonstrated a standard hardware device that is used for making an image of a seized hard disk or an external hard disk. The image that is made is a read-only image and hence nothing new can be over-written on these images as well as the viruses in the hard disk also do not infect the system on which the image data will be viewed. Arvind also told us that it is possible to retrieve the files which have been previously permanently deleted by the user. In fact, the current technology allows the retrieval of files which have been deleted upto seven levels e.g. if a hard disk has been formatted for six times, the data that existed on the hard disk initially could be retrieved. This was surely an eye-opener for us but others followed one after the other from Arvind in response to our questions to him.



A smart phone kit was then demonstrated to us which had around 100 different adaptors to charge a phone. It also contained a sleek device which is capable of taking a backup of all the data on the phone and the SIM cards (including data that has been deleted upto seven levels, as above) - contact details, call logs, SMS data, MMS data, photos, images, audio, video, e-mails.



Mr. Zeoline, a very enthusiastic member of the five-membered team then demonstrated us a software named FTKImager, which is used for analyzing the data in an image of a seized hard disk or an external memory. The files which have been deleted permanently could also be retrieved using this software. Additionally, those files whose file types have been intentionally modified to avoid being opened could also be easily opened in this software.



Mr. Arvind then showed us a skimmer, a device which can capture the details on a credit, debit or any other electronic card. He also said that this device is prone to a lot of misuse particularly by restaurant personnel who swipe the customers device on the device that they possess and also on this skimmer. The information stored in the skimmer device could later be retrieved by connecting it to a computer using a USB port and duplicate cards could be made.



All in all, it was a mind-boggling session. The immense knowledge and skills that Arvind and his team members possess was clearly evident in the way they responded to our bombardment of questions. The stipulated duration of the session was 30 minutes but the session continued for over an hour as a result. Finally, all of us were sent to the classroom as the next faculty was waiting.
A One Week Training Program at the South African Revenue Service (14-18 Nov 2011)

I am sorry that i have not penned anything for so long. Let me write about my experiences here at the SARS.

The one week attachment here in the Maxwell Megawatt Park has been an exceptionally great learning experience. Insights into almost all aspects of tax administration here at the SARS have been provided in the small span of four days and this surely reflects the amount of effort that the organizers Ms. Seboya Mogoba and Mr. Brandley Ngcobo from SARS International have put up under the coordination of Ms. Varsha Singh, Head of SARS International.



The sessions started with the history of SARS by Mr. Aiden Keanly, a very senior officer here at the SARS. This lecture set the context for the sessions that followed, covering aspects from tax legislation to tax administration. One key feature that was conspicuous was the vision and mission of SARS along with its mandate to modernize and reform itself continuously. Mr. Franz Tomasek, a senior SARS official who spoke on “Tax Law and Administration” pointed out that there are many different ideas that can be implemented to modernize SARS but what is vital is to prioritize and focus on four-five ideas rather than seeking up to implement all the ideas. Mr. Jerome Frey on the lecure on “Business Systems and Modernization” revealed SARS phased strategy to modernize itself in a span of seven years. This phased strategy has merits over sudden impulsive steps to change the procedures and processes of the tax administration given the fact that tax environment is itself very complicated and feedback of taxpayers and other stakeholders also need to be taken into account. These messages hold a lot of importance in the Indian context as well and there is surely a lot to learn from the way SARS has given a professional touch to tax administration, which is very unlikely a bureaucratic setup, even here at South Africa.



The highpoint for me during the attachment was a visit to the Computer Forensics Lab at the Large Business Center here at the SARS. We were shown demonstrations on how to make a read-only image of a seized hard disk, to retrieve and analyze the deleted data from a hard disk, to decrypt the files, to analyze the files whose file types have been modified, to make an image of all the data (call details, SMS, MMS, emails, photos, movies, contacts) from a smartphone, to retrieve the information on a credit/debit card etc. The Q&A session was very long and Mr. Arvind Maharaj and the five members working under him at the Computer Forensics were extremely patient to answer our queries.



There are definitely so many lessons to be learnt from SARS. The way in which modernization has been taken up in a phased and structured manner is worth emulating. The efforts of SARS in the field of tax education also are commendable. In this regard, we need to take cues from their practice of keeping the various brochures, pamphlets and similar educational material at all the libraries, national parks, malls and other public places so as to reach to the taxpayers. It was encouraging to listen to their future steps on spreading financial literacy by setting up stalls at the various malls and to include a cartoon-based chapter in the textbooks for school-children.


All in all, I am honored to be here at this training program and sincerely hope that all of us do justice to the huge amount of investment that has been done on us to send the entire delegation to South Africa. There are miles to go before we sleep !!!

Saturday, March 26, 2011

UPSC INTERVIEW 2011
Me: Good Morning, Madam. Good Morning Sirs.
Shashi Uban Tripathi (SUT) : Good Morning, Vikram. So, are you doing training?
Me: Yes, Madam.
SUT: Where?
Me: NADT. National Academy of Direct Taxes, Nagpur.
SUT: Oh..Nagpur (as if it was something new to her). So, Vikram, tell me, in very brief, about your academic and professional life?
Me: Madam, I completed my B.Tech in Biological Sciences and Bioengineering. Then, I worked in a start-up company working in the field of intellectual property and then I am here, in the IRS.
SUT: But, what did you do at Vellore?
Me: Madam, I had enrolled for a Ph.D program in Biomedical Devices and Technology. This program was good in the sense that I could enroll without having to do my masters. This program is an integrated Ph.D program among IIT Madras, Shri Chitra Tirunal Institute of Medical Sciences and Technology, Trivandrum – essentially a blend between medical science and technology.
SUT: So, you were there for how many months?
Me: Four months.
SUT: So, why did you leave?
Me: Madam, I wanted to do research on tuberculosis but there were not many professors working in this area. In fact, none in the IIT Madras was working in this field. This program required that one has to necessarily have a guide from IIT Madras and one from either of CMC or SCTIMST. They were suggesting me to change the problem but I was not interested. Fortunately, I got into the services. But, still I would like to work on TB in future.
SUT: But, that’s not possible given that you are into service and would have to do justice to your current job. Ok, so you read non-fiction. Which books have you read?
Me: Madam, I’ve read the ‘Google Story’ by David Vice, ‘Ideas and Opinion’ by Albert Einstein, ‘The Audacity of Hope’ by Barack Obama, ‘India Unbound’ by Gurcharan Das, ‘Imagining India’ by Nandan Nilekani..
SUT: So, can you tell me in very brief one of these books which you liked the most and why?
Me: Madam, the book which had the maximum impact on me is “The Audacity of Hope” by Barack Obama; the main reason being the way in which he has written as to how he got the idea of bringing change in the world. In one of his stories, he mentioned that his daughter had to be hospitalized and during this time, he saw the reality of healthcare in the US. He mentioned as to how healthcare reforms were the need of the hour. Similar is the case with his views on foreign policy.
SUT: But, if that is the case, then why is Obama’s popularity dropping by?
Me: Madam, I agree with you that his popularity is decreasing but I think the reason is the political constraints and compulsions in which he works.
SUT: But, compulsions are everywhere.
Me: Yes Madam, you are right. I know he hasn’t delivered but I sincerely hope that he does in the remaining period of his tenure.
M1: Ok Vikram. You have been running from pillar to post from Kanpur to Bangalore to Vellore. During this time, have you done anything for the society? Can you elaborate one incident which shows that you did something for the society?
Me: Sir, I worked with an NGO named Jagriti during my college days. Jagriti works in the field of education for the children of migrant workers. They have set up around 22 centers at various brick-kilns in Kanpur. We used to go there and teach. At one of the center, there was a girl named Sarita who had Rheumatic Heart Disease and needed a heart-valve replacement. The operation was to cost around Rs. 1.8 lakh. We, in our college, could manage to raise the amount and got her operated at Bangalore.
M1: But, that must have been a team effort. What was your role in this activity?
Me: Sir, I went along with Sarita and her father to Lucknow to get all the medical check-ups done. I collected all her medical reports, scanned them and mailed them to various charitable hospitals throughout the country. In the fund-raising, I had to coordinate with each hostel representative.
M1: Mr. Vikram, you appear to be so soft. Do you get angry? Have you ever beaten somebody? (laughs all around) I mean, physically or verbally.
Me : (I smiled for a second or two). There was one incident which I can recollect in which in our college, there was use of plastic glasses for drinking water, milk and tea. Inspite of repeated urges to the Mess Committee, when there was no action, I got very angry.
M1: So, it was a verbal fight.
Me: Yes Sir.
M1: So, have you ever beaten somebody.. I mean physically?
Me: No Sir, that I used to do in school..not any more.
M1: Vikram, what according to you is your best quality?
Me: Sir, my sir told me that although I am not very talented…
M1 (interrupts): I am not asking about your weaknesses but your strengths.
Me: I think that would be my being dedicated to my work.
M1: You are a student of psychology. How do you measure motivation?
Me: Sir, measuring motivation is something very difficult, the main reason being that it is something which is very subjective. The only way one can measure is through one’s actions. If somebody does something with full commitment and to the best of his/her capabilities, I think he/she is very motivated. He/she has found a purpose of life.
M1: So, can you give an example which shows your dedication?
Me: Sir, recently, I along with my friend were given the charge of making identity cards for all 152 of our batch. It was done because although it is the responsibility of the administration but since they had not done it well, our institute purchased a new identity card printer and we were supposed to design the card from scratch. We managed to do the task from designing till taking the final print outs one by one.
M1: So, did you work for long?
Me: Yes sir. Sometimes, it used to become 10 o’clock 11’o- clock and one day, I could sleep only at 4:30 in the morning.
M2: You have worked in the field of intellectual property. Can you tell me about your opinion on whether we should go ahead with GM food-crops or not?
Me: Sir, I think that we should not go ahead until we are absolutely sure about the safety of these crops. We, in India, do not have an independent regulatory body, that can testify that “Yes, everything is fine.”
M2: But, ICAR approved of the GM study?
Me: Sir, but as Jairam Ramesh, Mr. Jairam Ramesh has pointed out there are contradictory studies as well. Some studies have been done by Monsanto, which itself is a corporation and hence there is an underlying conflict of interest. Until we have a clear-cut conclusion that green signal can be given to GM crops, we should not go ahead with them.
M2: Tell me, what is ‘gene-erosion’?
Me: looking thoroughly confused…I asked him to repeat the same.
M2: Gene-Erosion i.e. the same as “terminal technology’’
Me: Sir, the terminal technology is the brain-child of Monsanto. It essentially means that a farmer can grow the crop using the GM seeds purchased from Monsanto only once. The next time, he has to sow the seeds; he would have to purchase the same from Monsanto again. This technology has been widely criticized as it is detrimental to the interests of the poor farmers of our country and the world.
M2: What are the different types of Intellectual Property in India?
Me: Patents, Trademark, Copyright, Trade-secrets, Service-Mark
M2: Anything else..
Me: thinking.
M2: GI
Me: Yes Sir, Geographical Indications. In Goa, there is …(i was forgetting “Phenny” here)
M2( started giving his inputs..i felt relieved because I was not able to recollect any other example of GI): They are very important e.g. Darjeeling Tea, ..(he gave one more example but I am not able to recollect that).
M2: Tell me about the importance of intellectual property. I mean, why do we have IPRs in the first place?
Me: Sir, the main intention behind IPRs is to foster innovation. It is basically a reward for the inventor for the efforts he/she has put in to come upto that invention. For example, a pharma company has invested so much in R&D to design a miniscule drug, we need to make sure that after the drug is invented, nobody else is allowed to freely manufacture the drug and sell in the market. A time-period of 20 years, in the case of patents is given to a company to sell that drug exclusively.
M3: What is Neemuch famous for? (Neemuch is in MP and is my place of birth)
Me: Sir, it is the eye-donation capital of india. The number of eye-donations from this district is the maximum in India.
M3: What type of donations are these?
Me: Sir, they are cadaveric eye-donations.
M3: Ok..but this could also be due to the population of Neemuch. Do you know the population of Neemuch?
Me: Sorry Sir, I am not aware of this fact.
M3: How long did you stay in Neemuch?
Me: Sir, till my 7th standard i.e. around 13 years.
M3: And you still don’t know the population of Neemuch. Ok, what else is Neemuch famous for?
Me: Sir, Neemuch is famous for opium-production.
M3: What are other places in India very opium is produced?
Me: Sir, Chittorgarh and Kota in Rajasthan..
M3: Any other place
Me: (Did not answer…I was thinking..may be, I think ‘pretending to think’ would be a better phrase here.)
M3 : In MP
Me: (did not answer..genuinely thought this time but it didn’t help)
M3: Are you aware of any war that was fought on the issue of opium?
Me: No Sir, I am not aware.
M3: Something in which East India Company was involved. It relates to an important event in history.
Me: Sorry Sir, I am not aware of the opium-war.
M3: What is “law of attraction”?
Me: Sorry Sir, I do not know.
M3: Do you not go to the bookshops? You have interests in reading non-fiction books.
Me: Sir, I do visit bookshops. I go to Crosswords..
M3 (interrupts) : This is a very famous book. The exact title is “The Law of Attraction – The Secret”? It was a best-seller for a long time on the stands.
Me: Yes Sir, Secret – I have heard that book. Is it that book which is a kind of self-help book?
M3: Yes, it is a sort of self-help book.
Me: Sir, my friend had recommended this book to me
M3: But you haven’t read it, did you?
Me: No Sir, I haven’t read it.
M3: Ok, in the book “Imagining India” by Nandan Nilekani, what has he mentioned specifically about the English language?
Me: Sir, Nandan Sir says that English is responsible for the IT revolution in India. Since we knew English and we could couple it along with our computing skills, we were able to successfully market ourselves to the developed countries and the entire outsourcing boom came. Also, English is a major unification force in the country. Since the South-Indians could not speak Hindi and the Hindi-speaking people in the North India have trouble learning the languages of South-India, both can interact in English. Hence, English brings us together.
M3: Inspite of the fact that English is a colonial language and not our own.
Me: Sir, Nandan Sir has said that the IT revolution occurred in India and not in China because Indians could communicate readily in English with the companies of the West. Hence, English was crucial in bringing the IT revolution.
M4: Vikram, have you heard of “black swans” in the context of public administration (I don’t know why he asked me this question..public administration was never my optional)
Me: No Sir….Does it mean ‘’something bad’’.
M4: No, it means that something unexpected. Do you think that unexpected events are a hindrance in public administration?
Me: Yes Sir. For example, the Japan earthquake. Nobody knew that it is going to come but it…
M4 (interrupts): Can you take an example from India?
Me: Sir, 2-3 days back, a police officer was burnt alive by a group of miscreants in Sawai-Madhopur district. There was fire in IOC godown in Jaipur. Suddenly, we had the 26/11 Mumbai attacks. So, something that comes without anticipation creates new hurdles in the already challenging life of the administrators.
M4: So, is there a strategy where in one can anticipate these events?
Me: Sir, it is possible. Through disaster management, we can create systems so that we can anticipate if an earthquake/flood/drought comes and what should be our strategy to tackle them. If we see the case of the Japan earthquake, authorities in Japan could disseminate the information to every Japanese citizen that a Tsunami is going to come within an hour.
SUT: Who are opium-eaters?
Me: Sorry Madam, I do not know.
SUT: Ok, your interview is over.
Me: Thank you madam.
As I stood up, Madam told me that opium-eaters are the Chinese and one board-member who was mentioning about opium-wars was actually fought between the Chinese and the East-India company. I thanked them once again and moved out.