The Indian Revenue Service Association has written to Prime Minister Narendra Modi seeking his intervention in various issues relating to the implementation of the Goods and Services Tax, which the tax officers say will substantially reduce the Centre’s tax earnings, curtail the power of the Central Board of Excise and Customs, and open the door for several legal issues.
“The vertical division, that too in the ratio of 90:10 below ₹1.5 crore, is not only an undignified bad optics to the Centre but also is likely to lead to a situation where only 18% of the assessee base is available with the Centre,” the letter said. “Such skewed distribution of assesses does not bode well for the Centre-State fiscal balance of power. With this ratio the Govt. of India may loose revenue to the tune of ₹1 lakh and 10 thousand crore.”
The tax officials’ association also pointed out that the cross-empowerment agreement worked out by the GST Council would mean that tax officials would be appointed without going through the historically standard procedure for the hiring of such officials and would curtail the functions of the CBEC, which was created for such a function.
“In the present instance, there exists a bureaucracy appointed through UPSC process and is appointed at the pleasure of the President,” the letter said. “Delegation of Central indirect tax related assessment function would amount to appointment of State officers indirectly without undergoing through the UPSC selection. CBEC officers are capable of discharging the duty cast upon them and it is submitted that they be allowed to continue with such functions.”
Another important issue raised by the agreement arrived out by the GST Council is the problem of Parliamentary oversight, according to the IRS Association, which said that the proposed system would severely curtail such oversight.
“IGST assessment errors by state government officers would go outside the oversight of CAG (Comptroller and Auditor General) and PAC (Public Accounts Committee),” the association said in its letter. “CAG and PAC submit reports to the parliament, to which the CBEC tax administration is answerable. However, such oversight collapses once the powers under IGST is delegated to the States and effectively leads to grant of power without any accountability. This is constitutionally impermissible.”
The main problem, the association said, is that the role of tax specialists has been assigned to ‘generalists’ who do not have the experience or in-depth knowledge to handle all the various issues that could arise due to the implementation of GST.
“GSTN has been manned by non-IRS officers at senior levels,” the letter said. “There are security and financial concerns in GSTN (GST Network), which could have been avoided by giving this work to DG, Systems, CBEC. CAG and Home Ministry gave already raised concerns regarding GSTN.”
However, despite raising these issues, the association admitted that the final call would of course remain with the government, and that the tax officers would abide by whatever the government decided.
