An association of tax officers has written to the Prime Minister’s Office (PMO) expressing apprehensions over the implementation of the Goods and Services Tax (GST) and its impact on the central government’s revenue collection.
In the 11-page letter, the association has expressed reservations against the limitation on the functions of central officers in charge of indirect taxes. These are officers from the Indian Revenue Service (IRS), in the central government departments of customs, central excise and service tax. The officers feel that their career growth will be stunted with GST.
With the GST council’s decision to divide tax payers with annual turnover of up to Rs 1.5 crore, between the Centre and the states in the ratio of 90:10, the IRS officers feel that their scope of work will be severely limited.
“With a shrinking assessee base, the career growth prospects of IRS officers also get stunted,” said Anup Srivastava, president of the IRS association.
The letter to the Prime Minister’s Office proposes revising of this ratio to a 50:50 division between states and the centre.
Currently, there are 30,000 officers with the central government for the administration of indirect taxes and an equal number with the states.
But with only 18% of India’s tax payers available with the central government officers, their work will be reduced, perhaps putting the survival of the department at risk.
“Our officers have tirelessly been working on GST for last 10 years and wish to nurture it, having got requisite expertise” says the letter.
The letter also points to how the central government will lose out on revenue worth ₹1.10 lakh crore because of dual control of taxes under GST.
The unification of all indirect taxes under GST would mean that states will now be able to tax services, a power that at present lies with the central government. “Service tax is new to states and we are concerned about how they will manage it. They are used to a single worksheet for VAT. We have highlighted this in the letter,” said Srivastava.
The letter also points out how the GST network or the IT backbone of the new tax does not have any senior IRS officer heading the team.
A top officer in finance ministry assured that the government would take all necessary steps to ensure that the GST is properly rolled out “The concerns and fears of tax officers are understandable but the government will obviously not implement a faulty GST,” the officer said.