ALL INDIA ASSOCIATION OF
CENTRAL EXCISE
GAZETTED EXECUTIVE
OFFICERS
President:
Address for communication: Secretary
General:
R.
Chandramouli 240,
Razapur, Ghaziabad-201001 (U.P.) Ravi
Malik
Vice Presidents: P. Parwani, L. L. Singhvi (Central);
Anurag Chaudhary, Ravi Joshi (North); N. Raman, G. Srinath (South); B. K.
Sinha, Ashwini Majhi (East); Rajesh Chaher, J. D. Patil (West) Joint
Secretaries: Anand Kishore, J. S. Iyer (Central); R. K. Solanki, Ashish
Vajpeyi (North); M. Nagaraju, Ajithkumar P. C. (South); P. K. Sen, S.
Bhattachariya (East); Jasram Meena, M. K. Mishra (West) Office Secretary: C.
S. Sharma Treasurer: N. R. Manda Liaison
Secretary: A. S. Kundu Coordinator
on Telangana: P. Shravan Kumar
(Recognised by G.O.I., Min. of Fin. vide letter F.No.
B. 12017/10/2006-Ad.IV A Dt.21.01.08)
Ref. No.
115/A/16
Dt. 06.07.16
To,
Sh. Arun Jaitley,
The Hon’ble Finance Minister,
Govt. of India,
New Delhi.
Sub: Revival of Satyagraha by Central
Excise Superintendents.
Sir,
Kindly refer to the Ref. No. 106/A/16 Dt. 20.06.16 of the
Association.
2. It is submitted with due regards that the state
government employees are being impressed to be given the units upto the turnover
of Rs. 1.5 crore under their exclusive control alongwith audit &
enforcement functions on implementation of the GST. This is
being done under the presumption that there is no work to be looked after by
the Central Excise officers because of these units being fallen under the
category of SSI. No need to say that this will result into "only less than
10% of work" left with CBEC affecting the already worst career prospects
of its employees including group 'A' to group 'C' in general and group 'B'
Central Excise executive officers in particular in the worst manner.
3. Under
Central Excise tax administration, small tax payers are understood to be fallen
under the category of the turnover of "upto Rs. 1.5 crore". Whereas
under Service Tax, this turnover is understood to be "upto Rs. 10
lac". Thus, a bulk of the small and marginal tax payers will be covered
under the category of the turnover "upto Rs. 1.5 crore".
4. Central Excise tax administration is already
dealing with both small and large tax payers both for goods and services. In goods,
more than 40% of SSI units don't avail the benefit of exemption for the purpose
of availing CENVAT credit facility and the work relating to tax administration
starts from Rs. 1/- of turnover in such units. Like it, work of tax
administration also starts from Rs. 1/- itself in the units doing job work for
branded goods. Thus, presumption that there is no work relating to tax
administration in the units upto the turnover of Rs. 1.5 crore is totally
wrong. There is no bar also that only 40% SSI units would avail CENVAT credit
facility. 100% SSI units may also avail this facility on the "same time".
Further, Central Excise tax administration is also dealing with the first and
second stage dealers, which counters the argument that small dealers are more
habitual of dealing with the state administration.
5. Central Excise tax administration
is spread throughout the country administering the Service Tax and Central
Excise law since very beginning. Therefore, the tax administration model under
GST without any control of central tax administration over a vast proportion of
assessees is fraught with several administrative and fiscal implications. The
demand of states must be seen and understood in the light of the following
implications-
i) Central indirect tax
administration shall have no control over more than 90% of tax payers losing
vast proportion of its tax base.
ii) The assessees with the turnover
upto Rs. 1.5 crore hold the maximum potential in terms of growth and tax
buoyancy due to significant under-reporting. Actually, this is the category of
tax assessees having huge possibility of widening of tax base resulting into
huge tax administration work.
iii) The tax administration of large
assessees can't be held immune from the administration of small assessees
because of convergence of business, large and small being the part of same
supply chain.
iv) Implications of administrative
decisions on one category shall have precedent value and therefore, determine
many judicial pronouncements in the case of other.
6. The handing-over of the units
upto the turnover of Rs. 1.5 crore to the states shall crop up the following
issues-
i) It shall lead to mushrooming of a
large number of proprietorship concerns by the assessees in order to remain
below the threshold turnover or under-report their turnover to escape the
clutches of dual tax administration, thereby incentivizing the dishonest tax
assessees.
ii) The fate of the assessees at the
cusp of the threshold limit shall always hang in uncertainty because of the
turnover being a dynamic variable. The turnover may increase or decrease every
year leading to a scenario where assessees continue to shuffle between the two
tax administrations leading to uncertainty and compliance issues.
iii) The objective of bringing
uniformity in law and procedure as envisaged under GST will be lost because of
inter-state variations on interpretation of legal provisions and adoption of
different practices.
iv) The states will not be able to
verify the credit availed by the assessees because of not having pan India
jurisdiction. There will also be no verification by Central tax administration
for the credit passed on by the small assessees to large assessees for payment
of CGST and IGST.
7. It is evident from the above
submissions that the reasoning advanced by the states is flawed and will not
only defeat the very purpose of GST but will also lead to a scenario whereby
the fiscal destiny of the centre would be entirely in the hands of the states.
No need to say that it would also spoil totally the already worst career
prospects of the group 'B' executive officers working under CBEC. As far as the
share of tax is concerned, it may be distributed in the manner convenient to
the states but handing-over of the units upto the turnover of Rs. 1.5 crore
would not only place the central tax administration in inconvenient position
but would also jeopardise the career prospects of all executive officers under
CBEC.
8. In view of the above, it is
requested that the states may kindly not be handed-over any unit under the GST
regime or they may be handed-over the units only upto the turnover of Rs. 10
lac. Instead, the manpower and tax-net of central indirect tax administration
may kindly be increased at every level sufficiently. Accordingly, one more
demand may kindly be considered duly regarding the Satyahraha programme being
observed by Central Excise Superintendents as below-
E. Handing-over of no unit or
handing-over of the units only upto the turnover of Rs. 10 lac to the states
under GST.
Thanking
you,
Yours faithfully,
(RAVI
MALIK),
Secretary General.
Copy with the request for
necessary action to-
1) The Prime Minister of
India, PMO, South Block, New Delhi.
2) The MOS, Ministry of
Finance, North Block, New Delhi.
3) The Cabinet Secretary,
Govt. of India, President House, New Delhi.
4) The Secretary, Department of
Revenue, North Block, New Delhi.
5) The Chairman, CBEC, North
Block, New Delhi.
6) The Member (P&V),
CBEC, North Block, New Delhi.
7) The Joint Secretary
(Admn.), CBEC, North Block, New Delhi.
8) The Chief Commissioner
(DZ), Central Excise, C. R. Bldg., New Delhi.
9) The Commissioner of
Police, Delhi Police, New Delhi.
(RAVI
MALIK).
