Breach Of Trust...

                                              

          The first GST Council Meeting was held in September, 2016, where the apprehensions about various issues like the one state one vote, exemption limit (turn over), cross empowerment to avoid dual control and threshold limits (with states demanding that they be given the legal and administrative powers for imposing tax on entities with turnover of up to Rs. 1.5 Crores) were deliberated. From the beginning it was emphasized that the proposed GST regime is to be rolled out from 1^st April 2017.

Second Meeting..

     The GST Council finalized five subordinate legislations relating to payment, returns, refunds, invoice and registration. It also reached a consensus on area-based exemptions in accordance with those granted under the current excise regime. The Council decided that under GST, taxes will have to be collected and it can be reimbursed from the annual budgets to the exempted categories. However, the Council faced differences over approving the minutes of the last meeting as certain States disagreed with the decision of Centre assessing the existing service tax assessees in the new regime.

Third Meeting..

                  The GST Council reached a consensus on state compensation - the base year will be 2015-16. A four-tier rate structure comprising a lower rate of 6%, two standard rates of 12% and 18%, and a higher rate of 26% with an additional cess for luxury and demerit goods were proposed. Such cess has been proposed to be used for payment of compensation to the States. However, consensus could not be reached. The Finance Ministry then set the 22nd November 2016 deadline for building consensus on all issues in the Council.

Fourth Meeting..

                 A four-tier GST rate structure of 5%, 12%, 18% and 28% was decided by the GST Council. Essential items including food to be taxed at zero rate. The lowest rate of 5% would be for common use items. 12% and 18% would be the standard rates. The highest rate would apply to luxury and demerit goods, which will also attract an additional cess. The collection from this cess as well as clean energy cess will be used for compensating states for any loss of revenue during the first five years of implementation of GST.

 GSTN Portal was launched.

Fifth Meeting…3^rd December 2016.

             Again, consensus could not be reached on the issue of sharing of administrative powers between the Centre and the States.

Sixth Meeting…11th December 2016.

               Yet another meeting of the GST Council ended inconclusively, as the contentious issue of dual control of assessees could not be sorted. Draft GST legislations were discussed at the meeting.

Seventh Meeting…23rd December 2016.

                No consensus was reached on the issue of dual control. Draft CGST and SGST Law were cleared along with compensation law.

Eighth Meeting…3-4th January 2017.

                 Issue of dual control remained unresolved. Some states have raised a new issue - to split the tax in the ratio of 60:40 between States and Centre, instead of equally dividing it. In fresh roadblocks to GST rollout, states demanded taxation rights for sales on high seas and also increasing the number of items on which cess is to be levied to compensate the states to deal with revenue loss estimated at Rs. 90,000 Crores, post demonetisation.

            Initially a Rs. 55,000 Crores GST compensation fund was proposed to be created by levying cess on demerit or sin goods and luxury items, but post demonetization, the compensation amount is expected to go up to Rs. 90,000 Crores, as most states have seen revenue decline of up to 40 per cent, non-BJP ruled states claimed.

                  Also, coastal states pressed for rights to levy GST on trade of goods within 12 nautical miles offshore, holding up finalising of the draft law for levy of Integrated-GST (IGST) on inter-state trade.

Ninth Meeting… January 16, 2017

               There was broad consensus for GST to be rolled out from 1st July 2017, instead of 1st April 2017. The issue of dual control was broadly resolved. States will have powers to assess and administer 90 per cent of the tax payers having less than Rs. 1.5 Crore annual turnover, while the remaining 10% are to be controlled by the Centre. Tax payers with turnover of more than Rs 1.5 Crore will be controlled and administered in 50:50 ratio both by State and Centre. States can levy GST within 12 nautical miles offshore.

                       Now, more or less, the storm of GST is over. The Centre was not only silent but was also soft towards the states who not only resisted the Centre’s authority, but were also not willing to either vote on issues, whether it is turnover, compensation, dual control, threshold. To our dismay, the Centre agreed to surrender in the name of consensus, so that GST can be rolled out from 1^st July. After demonetization, new issues were raised regarding the compensation, control over High Sea sales etc.

                 In the present scenario, no one dares to raise any question about the reasonability about the issues being raised by the States and are expected to only listen, that too silently & obediently, whatever is said by the authority. What is the gain, why was it stretched for so long when the Centre was ready to forgo everything in one go. Although it is a high level decision, but the manner in which the decisions were being made, points not only to a lack/loss of trust between the Centre & the States, but also undermines the supremacy of the Centre in taxation matters. Such type of U-turns have never happened before. History will remember them for what they have asked and what they have offered, which has not happened in the past.

                                The present decision expanded the base of State VAT and delimited the heritage base of CBEC. In the meeting, prominent FMs were from Kerala, West Bengal & others were beneficiary with their aggressive representation. No one spoke or analysed the state of affairs of the VAT Department, whether it is Rajasthan, Haryana, Punjab, Madhya Pradesh etc. They have achieved beyond their expectations.

                             There is absolute pin-drop silence from the more than 15 registered Associations of CBEC including the Group-A ones. It is not a shock that they are still under trauma but it is unable to even decide from where to start and how to stop the irreparable damage that is being caused. They are not able to even raise their voices, against what has not only shaken their career progressions, but also the assessee base in-toto and has doomed the service forever. The encroachment which has taken place will yield its results in future, but as on date the assessment made by our front is full of faults as well as reeks of incompetence.

                                     Since the planning of GST, several batches of ACs, Inspectors, Tax-Assistants were recruited enmasse, who have just joined this Department with an expectation that they will prosper. The recruitment and cadre restructuring was done keeping an eye on the GST implementation. This Department will have a commendable position to administer - all are shattered in one go. Customs, Central Excise, Service Tax, in all the arenas, the  state has very meticulously entered, nothing remains safe or protected that it is ours and the rest is theirs. Thousands of employees, whose loyalty kept the flag of CBEC flying high, are deeply hurt.

                                   In CBEC, a few learned Senior Officers, who author and publish books, some in taxation matters and one or two in day-to-day service matters. The last book was published by Sh. A. K. Pandey, member (P&V), titled as "Grit That Defied Odds". The present officials, who have witnessed the ups and downs and finality of GST in front of them, what prompted them to remain as a silent participant (like a back bencher in college) and given all consent to them. ("The drafting of IGST is a clear cut sabotage by our own officers" ) and the culture of percentage 10% as well as 50-50 - who promoted these concepts ? The services of all Cadres, in every capacity, was not spared - everything is snatched, left only with a begging bowl !!

                                      The word ‘Salt’ was removed from the Salt Act, 1944. The day it was removed, loyalty perished and now loyalty to the service appears to be no more.

                                        CESA, Mumbai appeals to all the office bearers to come forward and rise to the occasion, like in the case of autonomy of the RBI. Employees should stand for their autonomy as like Khadi Gramudyog as like Jallikattu, when they feel that something is infringed. We hope that we will all be united to submit our stand, before the final round of GST council Meeting, which is scheduled on 18^th February, 2017.

                                      Being a Central Government Employee, we all want a strong Centre, as well as a strong GST and will endeavor to our best for a smooth transition from present tax regime to the new tax regime…

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