The first Large Taxpayer Unit (LTU) in Bangalore has completed a year of successful functioning on 3rd October, 2007. Finance Minister in his Budget Speech 2005-06 announced the proposal to set up LTUs to act as a single window facilitation centre for large entities paying excise duty, service tax and corporate tax/income tax. The LTU began with 28 large taxpayers, which during the year itself grew to 45, comprising 350 central excise/service tax registrants and 509 TANs (Tax Deduction and Collection Account Number).

The Client Executive model adopted by the LTU has facilitated a proactive approach in resolving all issues faced by large taxpayers. The Client Executive is assigned by the Chief Commissioner, and is the single point interface with the large taxpayer for any assistance, clarification, and grievance redressal. This has also accelerated the disposal in key areas of work. Out of 4911 refund claims filed, 4883 claims were settled within 30 days of filing of the claim. All provisional assessments pending over one year have been finalised. Brand rate fixation of drawback was completed within 45 days. All Show Cause Notices pending beyond 3 months have been adjudicated. Cases in appeal were also decided within three months. All applications seeking approvals or permissions, filed electronically by the taxpayers, were granted within two days. Regular interactive sessions held by the Chief Commissioners and other senior officers with the large taxpayers have improved their compliance levels. 100% Excise Returns (ER 1) were filed electronically, which were scrutinised within one month, leading to detection and recovery of Rs. 32 crore of duty/tax. Over 90% of the taxes have been paid through the electronic mode.

Indirect tax collections of the Bangalore LTU have shown a healthy growth. During the first half of current financial year, the central excise collections of LTU grew by 45% and service tax collections grew by 21%.

The service delivery standards set by the LTU Bangalore has resulted in reduction of the compliance costs of the large taxpayers, and addressed their tax related concerns in a fair and transparent manner.

The Government has decided to operationalise the next LTU in Chennai in December 2007, and thereafter in a phased manner in other metro cities. For Chennai LTU, already 36 potential large taxpayers have expressed their willingness to join it.

Single window facilitation for large taxpayers improves processing times and increases electronic compliance and collections. Establishment of a Large Taxpayer Unit as a single window facilitation centre consolidates excise, service tax and corporate/income tax administration for large assessees. The Bangalore LTU applied a Client Executive model providing a single point interface, achieved rapid processing of refunds and assessments, expedited adjudication and approvals, increased electronic filing and payments, improved compliance monitoring and higher indirect tax collections. The model reduced compliance costs and will be expanded to Chennai and other metropolitan centres.