Using IDEA's Correlation to Detect Excise Duty Evasion

Hi,

IDEA's Advanced Statistical Method - Correlation can be used to detect specific Item Codes where potential Excise Duty evasion is rampant.

Following steps may be undertaken within IDEA -

a. Obtain the Outward Register containing the Item Code, Item Description, Date, Location, Quantity, Unit Rate, Basic Value, Assessable Value, Excise Duty, Chapter Heading

b. Append a virtual numeric field titled 'Month' using criteria @month(Date)

c. Perform a Summarization with Fields to Group On being Item Code, Item Description and Month and Numeric Fields to Total On being Quantity and Excise Duty

d. The resultant file arising out of the Summarization will have the Item Code, Description, Month, Total Quantity and Total Excise Duty

e. Now apply Correlation with Fields to Correlate being Total Quantity and Total Excise Duty and Fields to Group On being Item Code

f. The Correlation Result will reveal negative correlation scores tending to -1 indicating a negative correlation or inverse relation between Total Quantity dispatched item wise month wise and Total Excise Duty paid thereof for the corresponding period.

So Items displaying an inverse relationship of increasing quantity dispatched across sequential months and falling excise duty levied and paid can be taken up for further scrutiny.

Kind Regards

Jairam