FM allays fears, says enough opportunities for officials in indirect tax regime

Central Board of Excise and Customs (CBEC) Chairman Najib Shah on Friday raised concerns over the proposed goods and services tax (GST) on behalf of excise and service tax officials on the same dais where Finance Minister Arun Jaitley was present.

There is lingering fear among tax officials that their work will be reduced because of the division of the administrative turf proposed in the GST regime.

The occasion was Customs day, but officials were not pleased with the way the Centre bowed down to states over the division of administrative control between the Union and state governments.

The IRS Association earlier this week had decided to not to celebrate Customs Day at any place and wear black badges on January 30, Martyrs' day.

Shah drew Jaitley's attention to “the rising disquiet in the cadre”, saying there were human resource issues in the service.

Jaitley tried to pacify Shah, saying any such disquiet would come down as GST will create ample opportunities.

“Therefore even though you have two parallel machineries which could now be converging into similar kind of activities and shared responsibility, I think the future will stand witness to the fact that there will be adequate amount of opportunities to be created and therefore the kind of disquiet in service, the kind of personal pressure I see on you should reduce as there is no real occasion for a fear of this kind or a sense of insecurity for anyone in this service,” he told Shah.

The finance minister said change and evolution are an integral part of any economic order, and they are never held back because the nature of responsibility was going to change.

“This is an ongoing process; it will continue and we will all have to adjust ourselves with this particular change. I can only assure you that there is no reason for disquiet, you can go and have a comfortable sleep tonight,” he told the revenue officials.

Jaitley said officials should have no insecurity as enough work and opportunities would be available to them in the new indirect tax regime.

“I see no reason really for disquiet for the simple reason (that) opportunities which are available to people in service and the matter of policy and constitutional guarantee are all protected,” he said.

Revenue Secretary Hasmukh Adhia told the officers they would have enough work to do under GST.

The IRS Association recently expressed concern over some of the decisions taken by the GST Council, headed by Jaitley. The meeting was attended by Shah.

Another association of central revenue employees had raised similar objections and threatened to take legal recourse in case their concerns were not addressed. It had also termed as "illegal" certain decisions taken by the GST Council and demanded that those be corrected.

The GST Council had decided the states would have the power to assess and administer 90 per cent of the taxpayers with an annual turnover of less than Rs 1.5 crore, while the remaining would be controlled by the Centre. Over this threshold, the states and Centre would have administrative control over assessees in the ratio of 50:50.

It had also decided that states should continue to levy tax on economic activities within 12 nautical miles within sea. Also, it divided administrative powers between the states and central officials in case of integrated GST (IGST).

In a series of tweets, the IRS Association asked the CBEC chairman if he could guide the thousands of service officers looking up to them. They also took up the issue of promotions with him.

At the Investiture Ceremony 2017 and International Customs Day 2017 organised by the CBEC here, Jaitley said only the nature of activity would change because there would be one national sales tax replacing an array of central and state levies such as excise duty, service tax and value-added tax (VAT).

“Important changes and evolutions which take place are never put on the back-burner” just because the people who conduct the activity would now have to work in an altered form and environment, he said.

The number of people required as well as the kind of opportunity would remain unchanged except that the nature of the activity itself changed, he said.

GST, Jaitley said, had for the past several years been considered as a larger part of policy consensus in India and an important taxation reform that would lead to the economic integration of the country.

“Once it takes place you have a situation where taxes (that) are levied by the state (and) by Centre (will) all be integrated into one and therefore resulting in one assessment.

“Multiple systems on assessment which is there at present will evolve into a newer kind of system,” he said.

Jaitley said the revenue to be collected was going to expand and there would be an expansion of economic activity as well.