The Indian Revenue Service along with other service associations of the Customs Central Excise and Service Tax reiterates its unanimous resolution and reiterates it’s commitment for successful roll out of Goods & Services Tax (GST) in the country and for achieving the objective of: One Nation, One Tax & One Market. The said modality is for the ease of business and also to facilitate growth of market besides leading to better tax complianceHowever, the same has to be done in a rational, transparent manner keeping in view the constitutional scheme and legality aspects, as well as the interests of tax payers, central revenues and central indirect tax administration. The collection of taxes is one of the most important and basic constitutional function of sovereign government. India although being a federal polity, there is added and special responsibilities on Centre for its unity, integrity and socio economic development. That’s why our Constitutional scheme is of “Federal in spirit, unitary in nature’’.
As a commitment towards the same, the department is not only imparting training to its own officers and staff but also to the officers and staff of the State Government. Besides this, the department is also enlightening the trade and commerce in the field of GST by way of organising Seminars, Workshops, Nukkad nataks etc. and is committed towards it. The Department has been involved in formulation and drafting of the law and procedure pertaining to the GST including the GSTN network. About more then 80 ercent of the work pertaining to the GSTN network has been done by the officers of the Directirate of Systems of the department. So to say that the officers of the service are being impediment in the implementation and roll out of the GST is noting but far away from the truth.
The officers of this department are under oath and are sworn by the constitution to safeguard the interest and the sovereignity of the country and are fully aware of their obligations towards the constitution and service to the people of the country.
However, in the present set of things and decisions, which has been taken in the recent meeting of the GST Council, it is felt that the basic structure of the scheme is being compromised and the same may lead to utmost chaos which may be detrimental not only to the revenue but also to the industry, trade and commerce in General.
Tax Collection is a sovereign function of the state and the Constitution provides for the collection of the same within a given framework. As per the said scheme, there exists the Central Taxes as well as the State taxes the collection of which vests with the respective autorities. This being a sovereign function does not have the mandate of delegation of authority. This also being the basic structure cannot be done away with as per the Full Constitutional Bench judgment of the Hon’ble Supreme Court of India in the case of Keshvanandan Bharati Vs Uinon of India and the famous Gorakh Nath case. These taxes form the part of the kitty of Consolidated fund of India and again as per the Constitutional Provision has to be audited by the CAG of India.
In the present scheme, the state has been empowered to collect both the CGST as well as the SGST. In the event of auditing of the factory from where the CGST is being collected by the State, to which authority the CAG would table the report? The Parliamentary PAC or the State PAC, besides this, for lapses, would the CBI and CVC have jurisdiction over the state where they do not have any jurisdiction? If that is not so then should the CBEC officials be subjected to detailed scrutiny, for the same work, by CBI and CVC? This may lead to the administrative problem and violative of Article 14 of the Constitution.
In addition to that, the Central agencies have the quasijudicial power which they have been exercising since decades and are having proper alternate remedies for dispute resolution. Here the power to adjudicate is there till the level of Commissioner who is equivalent in rank to the joint secretary to the union of India. Above that the first appellate authority is again a Commissioner followed by Tribunal. In all these stages the high principle and ethos of judicial discipline is exercised. In the state government, the authorities are more trained to pass assessment order which are very short unlike a detailed speaking order of the CBEC officials. This would again create procedural problem and may lead to opening can of litigations, and may lead to judicial intervention.
Giving the IGST under dual control, again is beyond the scope of the 101stconstitutional amendment. The duality of control would inturn lead to spurt in litigation amongst the states thereby increasing the burden on the courts which are already burdened.A living example of this is the cauvery water dispute. Same is the case of giving terrtorial waters power to the State, which may prove to be detrimental to the national security. It is presumed that a total of approximately 600 Cr is the State kitty from these waters, the Centre can very well compensate the States for the same the way it is compensating for the loss of their revenue.
The State besides this is not at all grilled or having expertise in handling the service tax sector and the same may lead to chaos and loss of revenue of thecentre as well as the state which would be detrimental to the revenue interest.
In the case of the officers from CBEC, the motive has been reduction of interface with the Trade and giving more credence to the trade by way of exhibiting faith in their conduct. This has lead the Centre to adopt the procedure of Self assessment and removal, including factory ceiling of export consignment, as against the enforcement and nakabandi regime of the state. These officers do this factory ceiling under the Customs Act, Besides this, operation of number of Domestic units as 100 percent EOUs involve both the functions of Central Excise as well as Customs. The State machinery is not at all grilled and trained for the same and this may lead to unnecessary delay and hinderance in trade.
The present concept of allowing only one authority for the assessee for assessment and audit f CGST, SGST and IGST and accordingly cross empowerment of Central and State government for the same presumes that both the administrative machinery at the Centre and States are at par. However, the actual position is that the officers of the central government machinery i.e the CBEC in every grade are placed above their counterpart in the States in terms f pay scale and the method of selection. As a result of which some assessees, which would go to the state government would be subject to assessment and audit of the CGST, SGST, IGST by an administrative set up which is definitely not at par with the central government which would be doing the same for the other unit. This would lead to a situation where element of discrimination crops in which is against the basic principles of equality before law.
These steps may become detrimental to the ease of business and may result into increase in the transactiomn cost for the business due to increased litigation. Besides this, the chances of loss of legitimate revenue of the exchequre is also there.
Sanction of refund under cross-empowerment is also not acceptable as it amounts to withdrawal of money from each other’s Consolidated fund for which there is no mandate in constitution. The processing of refund can not be delegated to State Government officers without taking approval of the CAG and appropriate accounting authorities.
This it is felt that in the long run, may weaken the Federal Structure of the nation and may lead to weakening of the centre. The officials of CBEC are under the Oath to abide by the constitution and work in the interest of the nation without any fear keeps the national interest as its paramount goal and accordingly feels that these issues needs to be addressed. Any decision taken in hste may lead to a situation wherein the national interest gets jeopardised and the trade and industry suffers which would not be in the interest of the nation and its economical growth.
The IRS officials also feel that The GST Council, in the present form, has representatives from all the State Governments as well as Central Government through the Hon’ble FM. All have voting rights. However, the post of Secretary to the GST Secretariat, as well as Additional Secretary are IAS officers. CBEC Chairman, the lone domain specialist is merely an invitee. Thus a situation has been created wherein the officials having thorough domain knowledge have been sidelined in favour of generalists having their own agenda. Accordingly, the concerns of CBEC and indirect tax experts are not adequately represented in the GST Council leading to adverse decisions such as the one dt. 16-1-2017. This anomaly needs to be corrected by appointing Secretary and Additional Secretary in the Council from an IRS officer.
Association does not agree with the decision of GST Council as it will not only weaken the Center but also adversely affect the Indian Economy and Revenue collection further National Security has also been compromised. Association requests Authorities to take immediate necessary action to resolve the above issues and to defer the unjustified decision of GST Council, taken under pressure of State VAT official’s pressure.
Joint Action Committee of Associations of Group A,B,C & Ministerial passes Resolution that if the above genuine demands in national & Revenue interest is not considered than this disciplined group of 70000 officials will be forced to initiate non cooperation movement following Gandhian methods of Satya-agraha. Action plan of above movement will start with:
1. Wearing of Black Bands by 70000 officials of CBEC on 30th January on Martyrs day.