An algorithmic approach to handle circular trading in commercial taxing system

Tax manipulation comes in a variety of forms with different motivations and of varying complexities. In this paper, we deal with a specific technique used by tax-evaders known as circular trading. In particular, we define algorithms for the detection and analysis of circular trade. To achieve this,...

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Bibliographic Details
Published inarXiv.org
Main Authors Mathews, Jithin, Mehta, Priya, S V Kasi Visweswara Rao, Ch Sobhan Babu
Format Paper
LanguageEnglish
Published Ithaca Cornell University Library, arXiv.org 05.11.2017
Subjects
Algorithms
Apexes
Circularity
Graph theory
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Summary:Tax manipulation comes in a variety of forms with different motivations and of varying complexities. In this paper, we deal with a specific technique used by tax-evaders known as circular trading. In particular, we define algorithms for the detection and analysis of circular trade. To achieve this, we have modelled the whole system as a directed graph with the actors being vertices and the transactions among them as directed edges. We illustrate the results obtained after running the proposed algorithm on the commercial tax dataset of the government of Telangana, India, which contains the transaction details of a set of participants involved in a known circular trade.
ISSN:2331-8422