Tuesday, January 24, 2017

Letter to the Union Finance Minister

Posted by Secretary General on 10:54 PM with No comments
F. No. AICEIA/GST/2017/4                                                         Date:24.01.2017                                
To
Sh. Arun Jaitley,
Union Minister of Finance,
Govt. of India
       &
Chairman,
GST Council, New Delhi.

Sir,

          Subject: GST the biggest revolution in Indirect Tax Administration – suggestions reg.

At very onset, we the Inspectors’ of the Central Excise put it straight before your good office that entire Cadre is apprehensive yet appreciative and ready for being part of the biggest ever revolution in the Indirect Tax Administration of the Country.
A tax administration, we understand, is as good as it reflects on the ground. It is at the ‘cutting edge’ level, the administration is seen and assessed by the very citizen/ taxpayers. The day to day provision of service or lack of it determines how government will be perceived. The surveys made by the independent agencies acknowledge the fact that the lower executive formation of Central Board of Excise & Customs are working with positive attitude.
In this long walk to GST regime, we tried to submit our views & concerns for smooth transition several times through our CBEC administration, but every time the ground level sentiments were diverted with the comment that everything is in liquid state and unless it takes some shape it is not possible to talk on administrative part.
After the 9th meeting of the GST Council on 16.01.2017, which placed the GST implementation in an advanced stage, we find it as our moral responsibility to put before you the aspects which need consideration while implementing GST. For convenience these aspects are classified in following three categories:- 
a) Issues related to the Assessees:- Entire Tax Administration is based on the entities which are being assessed. The decision dividing the Taxpayers’ base in asymmetric cross sections both vertically as well as horizontally creates confusion and inconvenience among the Taxpayers, who expected GST to provide a simplified Tax compliance mechanism. Though actual parameters to effect such distribution is yet to be divulged, the business entities are anxious, with multi-location units fearing the fact that their one business            vertical may fall under Central Control whereas the other may fall under State Control, due to this random distribution.

b) Issues related to the Union of India: - We are proud to have the unique Federal Structure, where co-existence and togetherness is the key. The very purpose of GST implementation in our Country was to provide a better Fiscal Health to the Union and States as the unified system will minimize the revenue leakage.

There is an impression in general that this very purpose was lost midway due to conflict on control between the Central & the State Governments.
           
Sir, it is felt that in the quest to control, the GST Council missed the elementary point of Development Economics, where division of land reduces its productivity while division of labour increases it.      If the duties and responsibilities of Tax Administration are divided between the Centre and States instead of             Taxpayers base the administration will be more cohesive and firm. Even this cross administration will   minimize the chances of Revenue Leakage.

In the Global Scenario, the economic health of the country is the strongest parameter of gradation. For making India a dominating power centre of the world, we need a strong Fiscal position which is possible only when some controls are centralized and major policies don’t get blocked due to regional aspirations.

c) The Executers of transition:- The employees of Revenue Departments be it Central or State, are the primary carrier of transition and the success of the new regime mostly depends on their contribution. But, non-communications are creating panic among these parts of Administration regarding their role and position in the new regime. The Inspectors of Central Excise are the most stagnated Cadre working under the Government of India and despite this fact they work hard and discharge their duty with full integrity which results in Revenue Collection more than targeted. In such a situation if the question of job security comes even as rumor, it is sufficient to de-motivate and demoralize the Cadre and adversely affect the transition.

Above points of concerns are needed to be considered for successful GST implementation. We know that raising concerns is not our only responsibility; rather suggesting way outs for consideration also lies on us. As a responsible service association, which desires success of Government Policies, we propose following points for consideration:-

1) Instead of dividing the Taxpayers’ Base, functional verticals be divided between the Centre & the States. It may be done in a manner, where all core verticals like Registration, Assessment & Dispute Resolution etc. are put under state domain and all peripheral verticals like Audit & Enforcement, Automation, Taxpayers’ Service & Vigilance and Training etc. are kept with the Central. The dispute resolution function should be kept with the Centre, as the adjudication pattern in Commercial Taxes of the states is somewhat different from what we follow and would be in GST.
2) Apprehension in field formations as to their role in new regime be taken seriously and requisite policies may be framed, wherever necessary, in consultation with the staff association
3) There should be parity in duty, responsibility, position & career prospects of the counterparts of the Centre and State GST.
4) Inspector of Central Excise should be given with role in GSTN module.
5) Levy of IGST should be kept under Central Control to safeguard the federal structure.

Sir, we solicit an early action to ensure that already agitated, stressed Central workforce are soothed and also request your good office to give us an opportunity to be heard in person, so that the above submissions can substantially be placed before you.

Yours faithfully,
Sd/-

Abhishek Kamal
Secretary General


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