Summer Training Project

On
CBEC-Online Payments
In

Submitted for the partial fulfillment for the

award of the degree of
MASTERS OF BUSINESS ADMINISTRATION
(MBA)
Under the supervision of

Mr. Ashok Sharma

Submitted By

Mohinder Pal Singh

MBA

Enrolment No. - 0731913907

GITARATTAN INTERNATIONAL BUSINESS SCHOOL

(Affiliated to Guru Gobind Singh Indraprastha University)
Rohini, New Delhi-110085
(2007-2009)

Acknowledgement
I hereby express my deep sense of gratitude to Mr.
Nirmal Bansal (Executive Vice President, Regional
head- North region) for giving me an opportunity to
work on the project with HDFC Bank Limited.

I would like to extend my gratitude to Mr. Amit Goel

(Senior Manager) FIG, Delhi for providing me with an
opportunity to work on the project of CBEC- Online
Payments.

My special thanks to my project guide Ms. Aakansha

Mehrotra (Assistant Manager) FIG Delhi for extending
her full support and continuous guidance through out the
project. I also take this opportunity to thank all the other
employees of FIG, Delhi for their continuous assistance.

I would also like to take this opportunity to thank Mr.

Ashok Sharma faculty members and my guide who had
given me his quality time and valuable guidance because
of which I was able to complete this project successfully.

I would also like to thank various corporate personnel for

sparing their valuable time and providing me the requisite
information.

(MOHINDER PAL
SINGH)
0731913907

EXECUTIVE SUMMARY

HDFC Bank has been a front runner in terms of indirect

taxes since it was given permission to collect taxes. The
bank was awarded the approval to collect indirect taxes
(November 2003) along with few other private banks.

Indirect tax collection market has intense competition and

almost all the players have stepped up the services they
have been providing in order to survive and face
competition.

The trends in taxation were studied and this shows a very

positive picture for the years to come especially in case of
service tax which has increased immensely since it was
launched in 1994. With the increase in the number of
services to be taxed, the number of assesses is expected
to increase manifold thus bringing in a lot of new business
to the bank.

Questionnaire was developed as the key research

instrument. Some secondary data from the Excise and
customs Department was also used. Six parameters
namely ease of payments, speedy service, reminder calls
and e-mails, courteous staff, forex service and pick up
facility were chosen as the factors that govern the decision
of a person for selecting a bank for depositing tax.

Another important task was to find the most important

parameters that the people have in mind while depositing
their taxes and how these influenced the choice of the
bank. The corporates were asked to rate the important
variables that were identified as being important with
respect to the product.

People give the greatest amount of importance to the ease

of payments of their taxes and the second highest to the
pick up facility that the banks are providing.

The banks are currently providing almost the same kind of

services but keeping in view the increasing competition,
there is need to step up the services in order to gain new
clients and even to hold on to the existing ones. The bank
needs to use different kinds of services in order to lure the
existing clients of various different banks. The current
market leader is PNB, which was the only bank authorised
for collection of taxes on behalf of the government back in
1986. The bank needs to create awareness about its
authorisation as still many people are still not aware of it
being authorised.

HDFC Bank had the highest net advantage in the reminder

calls, pick up facilities, better e-world security features
over its nearest competitors such as Punjab National Bank,
SBI, ICICI Bank.

A positive response deposit indirect taxes with private

banks was received from 44% of the sample size while
56% of the people preferred to stay with nationalised
banks.

A Strenght, Weakness, Oppurtunity and Threat (SWOT)

Analysis was also carried out. The data base annexed to
the report could be used to contact potential customers.

Table of Contents

S. No. Particulars Page No.

1. Overview HDFC Bank 1
1.1 Introduction 1
1.2 Distribution Network 1
1.3 Financial Performance 1
1.4 Major Shareholders 2
1.5 Current Merger 3
1.6 Business Area 3
1.7 HDFC Bank Credentials 4
1.8 Awards 4
1.9 Product offerings 5
1.10 Management 5
1.11 Technology 6
2. FIG 6-7
3. Overview of CBEC 7
4. Indirect Taxes 8
4.1 Types of Indirect taxes 9
5. Trends in Taxation 15
6. Rounding off Transaction CBEC 17
7. The Product 17
8. Online collection Process for taxes 18
8.1 For corporate client 18
8.2 For retail 18
8.3 Online Collection Process 19
8.4 Benefits to CBEC online collection 19
8.5 Issues of Electronic collection 20
9. E-payment of central excise and 20
service tax
10. Enet 21
10.1 Product Features 23
10.2 Process Flow of payments 24
10.3 Security 25
10.4 ENet's 128 Bit PKI Encryption Security 26
10.5 Implementation 27
10.6 Documentation required for ENet 28
setup
10.7 Enet process flow (Diagrammatically) 29
11. Market Research Methodology 30
12. Benefits for all 32
12.1 Benefits to the Government 32
12.2 Benefits to the corporate 33
12.3 Benefits to the Bank 34
13. Findings 35
14. SWOT ANALYSIS 40
15. Recommendations 41
16. Limitations 41
17. Bibliography 42
18. Questionnaire (Annexure I) 43
19. Proposal (Annexure II) 45
20. List of authorised Banks(Annexure III) 48
21. List of taxable services (Annexure IV) 50
22. Data Base 54