GST - IN OUR PERSPECTIVE ... FROM SALT TO SERVICES

                    When tax was imposed on salt by the Britishers, the Father of the Nation started a Satyagraha in 1930, by making salt, which brought about the downfall of the empire finally in 1947.

        The Central Excise Act, which was earlier known as the Central Excise & Salt Act, 1944, along with around 240 Rules were introduced. In 2004, the word ‘Salt’ was removed and the new Act is known as the Central Excise Act, 1944, scrapping around 200 Rules and keeping alive only about 40 Rules.

Coming to GST, the said GST is aimed for creation of a common national market in the country by eliminating the plethora of taxes imposed by the Centre and State on movement of goods and services in the country.  3^rd August, 2016 will remain as a memorable day in the economic front, as a Constitutional Amendment Bill, amending Article 368, was unanimously passed, enabling the Centre to centralize the powers by withdrawing powers from the States for a unified taxing system - “One Country–One tax”. 

Finally, the Goods and Service Tax Bill has been passed. A great victory to the citizens of India for the much talked about bill being passed in the upper house of Parliament. The Act is likely to be presented in the coming winter session. Our country is an agricultural country and the economy is based on agriculture, which depends solely on monsoons for a bountiful harvest or face severe drought, which either brings smiles or tears in the eyes of people of our country. Whether the passing of the GST Bill will be beneficial to the digital traders or foreign investors or our domestic traders and/or the farmers and/or the common man, only time will tell.

A great relief, after a long tussle, has seen the day. It may take many more months to roll out its specifications and for its implementation.  CESA-Mumbai does not have the jurisdiction over Government Policy, because we are here only to implement judiciously and efficiently the policies decided upon by the Government of India. But the other stakeholders, state govt. employees, who will deal with state GST, have done so without compromising their dignity and their present grade.

In the GST, Petroleum products and alcohol are not covered in its ambit. The use of spurious Alcohol have caused several tragedies but only crocodile tears have been shed to show sympathy to those who have lost their bread-earners and shattered the dreams of innumerable families. The desire of the states to keep Petroleum products and alcohol etc. out of the GST is not entirely honorable, as it is a milking cow and is an additional means of fund raising for them. The states safeguarded their interest by keeping petroleum products and alcohol out of the ambit of GST and have protected their employees’ career positions and progressions with GST. As long as any policy has a vision, which is beneficial, as inscribed in our Constitution “for the people, by the people, of the people”, it will go a long way.

Presently, CBEC, comprising of three formations, i.e. Central Excise, Service Tax and Customs.  Recently, Income Tax senior officers had a meeting and passed a resolution that their Board should be headed by their own cadre and no other cadre will intervene in the decision-making process.

The new taxation system was the outcome of a report submitted by a committee headed by Shri VIjay Kelkar.  The process started in 2003 and has taken more than 13 years to reach this stage. Initially, it was planned to compensate the states around Rs. 5,000 cCores, which may have now reached more than 15 times.

We were fortunate to have hosted such a great luminary for our Mumbai Central Excise Day function in 2012.

In the proposed GST, Customs is excluded. The time has come that the career progression of Central Excise officers is also protected on the eve of new taxation system, otherwise the gap will widen further. Also the Bhardwaj Committee had recommended in the year 2003, merger of both the cadres, i.e. Customs and Central Excise, so that it is a unified cadre. However, the same has not been implemented till to date. Hence, if, in the new taxation system, where Central Excise and Service Tax play a major role, then once for all, it is better to be parted from Customs and to have our own systems to manage our cadres. The Officers of Central Excise and Service Tax will acquire skill, trained to deal with GST for smooth operation, then bringing officers from the Customs to grab the senior postings should not be allowed.  It is in the interest of the new taxation systems as well as the Central Excise and Service Tax Group ‘B’ & ‘C’ cadres. CESA-Mumbai expects the Federation to act promptly, otherwise, like the proverb goes, or we will be left searching for blankets when winter sets in.

GST is an opportunity to set right our long pending objective to mitigate stagnations in Group ‘B’ & ‘C’ cadres. The expansions will be in Service Tax and Central Excise, hence we should gear up to handle our own career progression exclusively by us only.

 PART-II

GST Bill rollout: As many as 60,000 revenue officials of central and state governments will be trained on GST laws and IT infrastructure framework to prepare them for rollout of the new indirect tax regime by April 2017.

As per the detailed Goods and Services Tax (GST) rollout roadmap prepared by Revenue Secretary, the IT infrastructure framework will be ready by March-2017 and a massive outreach and industry sensitization programme will also be launched.

After the training on GST laws gets completed by December-2016, GSTN will train them on the related IT infrastructure by March-2017. Goods and Services Tax Network (GSTN) is a non-government company set up by the Centre and states to provide shared IT framework and services to central and state governments, tax payers and other stakeholders.

The revenue department has already started stakeholder consultation with the industry in Hyderabad and Jaipur.

         The IT network of the Central Board of Excise and Customs (CBEC), banks, RBI, state accounting authorities and states will be ready by December-end 2016, according to the road map and the testing and integration of the IT backbone of all stakeholders is slated for January-March 2017.

         To make life easier in the new regime, the Revenue Department has planned fresh registration will not be needed for the existing dealers. Existing VAT/service tax/central excise dealer data are to be migrated to the GST architecture automatically.

         As for new dealers, a single application will be filed online and registration will be granted within three days.

         On GST returns, only one filing will be required for both the Centre and State governments.

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