Tax advocates have suggested to finance minister Arun Jaitley that administration of the goods and service tax (GST)– once it passes the legislative hurdle — be handed over to state revenue authorities and not the central ones.
The All India Tax Advocates Forum said that since such state officials “have greater penetration, spread and expertise” in administering diverse tax laws, including those on value added tax and central sales tax, they would be more suitable to do the job.
“At present, state revenue officials are effectively monitoring over 75 lakh registered dealers spread across the country, while number of dealers registered under Union Excise and Service Tax is about 17 lakh,” according to the Forum’s president, MK Gandhi.
In a letter to Jaitley, the forum has also suggested that to make administration of the new tax effective, a separate all India service for commercial taxes be set up on the lines of the Indian Administrative Service and the Indian Police Service.
The GST bill is stuck in the Rajya Sabha because of opposition by the Congress party, which has the requisite number of votes to block a Constitutional amendment envisaged under the new tax regime. The Congress has suggested several changes which the ruling party is unwilling to accept.
Gandhi said in a press release that state officials should also handle complicated issues related to inter-state taxation and would be well equipped to take on a regime which consolidates a number of central and state taxes.
Gandhi said officials of the Central Board of Excise and Customs (CBEC) were “well versed only in the nuances and technicalities of manufacture and not in trade transactions.”
Therefore, he added, it would be disadvantageous to the GST regime if CBEC officials were given the main role in administration of the GST.