NOVEMBER 25, 2014

By Sumit Dutt Majumder

CERTAIN issues relating to the Goods and Services Tax (GST) were being discussed amongst the members of a Group in the Facebook, where I am also a member. Given my experience in the field, perhaps, Shri Subhash Chandra Mathur, my senior Colleague while in service, requested me to clarify those issues. As I explained the basic issues, Shri Mathur urged the members to raise further queries if any, relating to the technical issues and implementation issues. There was overwhelming response. The members of the Group raising queries included S/ Shri Rajesh Pandey, Nearav Mallick, Shovit Jain, Suvir Misra, Rama Rao Metta, Raj Ahuja and Ms Rama Mathew. Besides, Shri Subhash Mathur himself raised certain relevant issues related to the actual implementation of GST.

This apart, during my talks on GST at different fora including the Chambers of Commerce & Industries, the Commissionerates across the country and NACEN, quite a few queries on related issues were raised by the participants. Given the larger canvas from where the queries were raised, I deemed it fit to serialise the queries and write my response to the best of my ability, and get it uploaded in the Tax India Online (TIOL) for the benefit of a larger section of readers. I thank TIOL for providing its platform. The issues raised/queries made and my response have been given below serially.

[1] Issue/Query

Why did we opt for the Dual GST model which is a very complicated method, both for the tax payers and the taxmen?

Response:

Basically, there were three models available for adoption, First, the Single (Central) GST model, where the Centre levies and collects the GST for both Centre and the States, and then distributes the share of the individual States in accordance with its consumption pattern determined on the basis of prior survey. It may be recalled that GST is a destination based consumption tax. This is prevalent in Australia, New Zealand, Germany etc.

The second option is to adopt the Single (State) GST model, where the situation is reverse of that in the Singe (Central) GST model. Here, the individual States collect GST for both Centre and their respective States, and then pass on the Centre's share to the Centre. Very few countries have adopted this model. A form of States GST is being implemented at the Quebec province of Canada.

The third option is the Dual GST model where both Centre and the States levy and collect their share of GST concurrently and simultaneously in their separate streams of Central GST (CGST) and States GST (SGST). The GST with respect to interstate movement of goods and services is the most critical part of this model. After considering twelve models for this purpose, it has been decided to adopt the Integrated GST (IGST) model. In the IGST models, the IGST comprising CGST and SGST will be levied and collected by the Centre. The Centre will retain the CGST share and despatch the SGST shares to the respective destination States. The entire mechanism will be computerised.

Because of the absence of complications involved in determining the GST share of the destination States with respect to interstate movement of Goods and Services, the Central GST model would have been the easiest option. But given the federal structure of our Constitution and fiscal autonomy for the States enshrined in it, India could not have opted for this model. On the other hand, the Indian constitution gives supremacy to Centre over the States in three important areas i.e. Defence, External Affairs and Finance. Therefore, the Centre cannot be made to outsource the collection of centre's portion of GST to the States. Thus, the best option for India was to adopt the Dual GST model.

[2] Issue/Query

It is said that Petroleum and Petroleum Products and Alcohol will remain outside the ambit of GST, and that although Tobacco & Cigarettes will be within GST, separate Central excise and State VAT, in addition to the GST, will also be imposed on these items. How will the credit chain/set off work when these goods travel in its journey from GST to Central Excise/State VAT regime and vice - versa? How will one implement parallel systems of taxation viz GST, Central Excise, State VAT, State Excise and CV duty in Customs, and still manage the transfer of credit.

Response:

This is no doubt a problem area. I have no readymade answer to it. But it is evident that the credit chain will get broken in such cases. I am sure, the TRU in the CBEC and the concerned Sub Committees under the Empowered Committee (EC) of the State Finance Ministers are studying the issue critically, and they would come up with a viable solution to the issue of transfer of credit in movement of goods through different tax regimes, GST and non-GST.

[3] Issue/Query

It is understood that both CGST and SGST will be levied and collected by Centre and the States respectively on the same set of goods and services and on the same set of tax payers ( assessees). How will it be ensured that action relating to short -levy/evasion detected by say Centre with respect to CGST will also be similarly taken by the respective individual States with respect to the SGST, and vice - versa. Further, what would be the procedure for harmonious approach in issuance of demand/show cause notice and follow- up adjudication and appeal?

Response:

The issues raised here are very important for successful implementation of the Dual GST model. Even at the initial stage of conceptualising the Dual GST model, it was realised that there will have to be total harmony in levying and administering the CGST by the Centre and SGST by the respective States. For this purpose, first of all, a model GST law will have to be agreed upon by Centre and the States. Based on that model, Centre and the State will draft the CGST Bill and the SGST Bill to be passed by the Parliament and the individual State Assemblies respectively. This will have to be followed up by the model GST Rules describing the procedures and formats in respect of implementation of GST at the cutting edge level. This model could be the basis for drafting the CGST Rules and SGST Rules. A total harmony in drafting the Act and Rules for CGST and SGST would ensure harmonious implementation of these two laws. For illustration, I would expect that once a case of short levy or evasion of CGST is detected by the Audit or the Anti-Evasion wing of the Centre, the Centre would so coordinate with the concerned State that similar action is taken by it with respect to short- levy demand or show cause notice for evasion of SGST, as the case may be. Needless to say, this would hold good vice versa as well.

As for adjudication and appeal proceedings, I have some personal views based on my interactions with the Chambers of Commerce & Industries and the officers of Central Excise & Service Tax across the country - both before, and after my superannuation. I would like to propose that once a demand/show cause notice is issued by both Centre and the concerned State, both the demands/show cause notices may be clubbed together and put for adjudication before a common Bench comprising an officer of an appropriate and equal rank, each from the Centre and the concerned State. The order passed by the Bench of adjudicators would be binding for both Centre and the concerned State unless appealed against. Any decision by the Centre and the concerned State with regard to appealing against the order will have to be taken jointly by them.

In the same line of thinking, the first appeals may be heard and decided by a Bench comprising Commissioner (Appeals) from both the Centre and the concerned State. In case of difference of opinion, it may be referred to a third Commissioner (Appeals) either from Centre or the State. The second stage of appeal would be the Appellate Tribunal, which may have one Technical Member from Centre or the States and one Judicial Member. The decision of the Appellate Tribunal will be binding on both Centre and the concerned State, unless it is decided jointly to appeal to the Supreme Court against the order of the Appellate Tribunal.

In my view, these steps would mitigate the Tax-payer's agony about approaching two tax administrations in the Dual GST system. I may however clarify that I am not privy to the discussions going on in the EC and TRU on these issues. But it may not be a bad idea to examine these personal views of mine.

[4] Issue/Query

What about harmony in the procedures of Registration, filing of Returns and Payment of Duty?

Response:

Harmony is envisaged in these business processes too. In fact, the GST Net (GSTN), the special purpose vehicle (SPV), set up as an IT infrastructure, to facilitate the administering of GST will have common GST portal to provide common Returns and common payment challans. For details, the reader may refer to a book authored by me and titled "GST in India - its travails, tribulations and challenges ahead" at - pages 355 to 367.

[5] Issue/Query

GST Net being a private entity, how will it be ensured that the core functions of CBEC and the State GST authorities are not taken over by it. Further, how will the Data Secrecy and Data Security be maintained.

Response:

These concerns arising out of the GST Net being a private entity were indeed raised in some quarters of the CBEC in October 2011 and even thereafter. But the objections raised in this regard were overruled, and it was assured that the GST Net would merely facilitate tax-payers services in an integrated manner while the core and statutory functions of the taxmen would remain intact. As for data security and data secrecy, it was assured that those concerns could be addressed by incorporating suitable deterrent provisions while signing the relevant documents with the GST Net. The documents would include Articles of Association (AOA), Memorandum of Associations (MOA), Share Holders Agreement (SHA) etc. The GST Net was also to be asked to build necessary safeguards in its system. Thus, at the implementation stage, the CBEC will have to take special care in ensuring that the aforesaid safeguards are put in place without any delay. These issues have been discussed in this Column (Goods and Services Tax – Simply Unstoppable). Besides, the reader can also refer to the previously mentioned book "GST in India" at pages 368 to 383, where these issues have been dealt with elaborately.

[6] Issue/Query

IGST for interstate transactions being the keystone in the GST structure, how will it be ensured that the computerised system does not fail, and if it fails, is there any back-up plan?

Response:

The 'GST Net' should be able to ensure an uninterrupted service. The details about the GST Net have been written in the aforesaid book on GST at Pages 356 to 367. However, it may not be a bad idea to have a back-up system to take care of all exigencies. The policy-makers at the Directorate of Systems and the Tax Research unit (TRU) of the Central Board of excise & Customs (CBEC) may like to take up the matter at the appropriate forum.

[7] Issue/Query

While on the subject matter of the GST Net, how will the data collected from the CBEC and the States be synchronised?

Response:

This is a challenge which GST Net will have to meet. The GST Net has already started collecting data for the past cases from the CBEC . The major responsibility of the GST Net would be data collation and the subsequent provision of the analysed data to the CGST and SGST administrations.

In this context, I must also reiterate that the IT ability of all the States would have to be brought up to a minimum level so as to enable all stakeholders interact through the common portal, and thus make the GST Net a successful venture.

[8] Issue/Query

What would be the role of CESTAT in the GST regime?

Response:

As mentioned in response to a similar query at Serial No. [3], in my view, the role of the Appellate Tribunal in the GST regime will get much more enlarged since the taxes subsumed in GST would include the pre- GST taxes like Central Excise, Service Tax, State VAT, which are now being administered by Centre and the States independently. The newly formed GST Appellate Tribunal will have to draw technical members from both Centre and the States in addition to the Judicial Members.

Simultaneously, the CESTAT in its present form will continue to exist to take care of the cases relating to Customs, Central Excise with respect to the goods that will remain outside the GST regime and all the Pre-GST cases of Central Excise and Service Tax.

[9] Issue/Query

There are certain critical technical issues with respect to few business processes which require clarity. Some such issues relate to Registration, Return, Payment, Place of Supply of Goods and Services Rules, Classification and Valuation etc. How far will the Concept Paper, to be brought out jointly by the two Chief Commissioners, assigned by the CBEC help in this regard?

Response

I am not aware of this development. But a Concept Paper bringing out these issues clearly will definitely help in framing the rules and regulations governing these business processes. Since the target date set by the Prime Minister is 1st April 2016, this will have to be expedited.

[10] Issue/Query

There is a detailed work by the GST Core Team appointed by the CBEC on most of the issues mentioned hereinabove. Why is this important report not most being put in public domain by the CBEC?

Response

Yes; a GST Core Team headed by Shri Gautam Ray (Sr.) did submit a very useful report called Discussion Papers in October, 2011 covering many critical technical issues, just before my superannuation. The said discussion paper was also perused by the then Finance Minister, who had appreciated the work done by the Core Team. I am not aware of further developments on it.

However, in the book on GST authored by me, I have devoted almost a full chapter on this Report explaining the observations and recommendations by the GST Core Team. A keen reader may like to refer to pages 259 to 311 of the said book for the details on the subject.

[11] Issue/Query

It is said that the GST rate will be fixed on the basis of RNR i.e. Revenue Neutral Rate. In that case, how will there be growth in revenue and growth in GDP after introduction of GST?

Response

Whenever a new Tax regime is introduced, it is so planned that the new effective tax rate is more or less same as that of the previous regime - so that the new tax regime is revenue neutral. Hence is the need for finding the RNR. More often than not however, the total revenue collection under the new tax regime turns out to be more than in the old tax regime for various reasons including administrative efficiency, enhanced tax base, structural reforms etc. That's the reason why it is expected that there will be growth in revenue in the GST regime.

As for the growth in terms of GDP, the introduction of GST will entail much less effective duty that a taxpayer would pay compared to what he is paying now on account of Central Excise, Service Tax, Stat VAT etc, all taken together. Besides, the reduction of multiplicity of tax and multiple points of collection will reduce the transaction cost and make 'doing business' much easier. Consequently, a taxpayers would have more money in his hands for further investment in infrastructure, industry etc. This will lead to more employment. All these factors would lead to growth in industry and business. Consequently, there is bound to be growth in GDP after introduction of GST.

[12] Issue/Query

There were certain queries with respect to the nitty gritty of technical/procedural issues in the GST regime. These are serialised below.

(b) What will be the treatment of 'Supply' in the GST context?

(c) What will be the general principles for place of Supply of goods and services?

(d) Who will be the 'taxable person'?

(e) What will be the Registration procedure and format, - particularly in the context of Principal place of Business for taxpayers having several places of business?

(f) What will be the Return format? - Will it be a simple one?

(g) What will be the system of verification/check of correctness of valuation and classification?

(h) What will be the treatment of 'Intermediate Goods'?

(i) Who will look after the packing of the export goods in the place of supply and that of the goods in domestic market at the place of supply? (There will be accounting issues here.)

(j) What about the control over 100 % EOU, and how would one keep the domestic clearances accounted for?

(k) How will the Refunds/Drawback be dealt with in the GST regime?

Response:

At the outset, let me state clearly that the nitty gritty of technical/procedural issues in the GST regime, some of which have been listed above, are still being worked out by various Sub- Committees and Working Groups under the EC in coordination with the CBEC. I am not privy to the latest position on these important issues.

Given the importance and criticality of the issues raised herein above, I would however like to point out that the issues/queries raised at (a) to (f) above relating to Valuation, Supply, Taxable Person, Registration Procedure, Return Formats etc have been dealt with in details in the Discussion Paper of the GST Core Team set up by the CBEC which submitted its report in October 2011. Because of constraint of space, i would urge the keen readers to refer to pages 259 to 311 of the previously mentioned book on GST where the findings and observations in the said Discussion Paper have been dealt with in details.

Other issues raised at (g) to (k) relate basically to procedural matters, and these are also expected to be thrashed out by the different Sub-Committees under the EC and the TRU in CBEC. We need to wait for some more time to know more about these important issues, when hopefully, the details would be put in public domain for a vigorous debate.

[13] Issue/Query

What will be the GST treatment of e-commerce?

Response:

It's a very important issue, particularly in the context of the fact that today a sizeable portion of transactions relating to goods and services take place through e-commerce. Some of the big players in this area are Flipkart, Quickr, Snapdeal etc. The policy makers will have to study the issue critically and then frame the rules on this matter, taking care of all the foreseeable issues. The Sub- committees under the EC and the TRV of the CBEC will have to give special attention to this emerging issue of GST treatment of e-commerce.

[14] Issue/Query

In terms of Para 3.2 (Viii) of the Fist Discussion Paper (FDP) released by the EC in November 2009, the 'Dual GST' model would envisage administering of CGST and SGST separately and concurrently by Centre and the States. But it is now learnt that on demand by the States, the Centre has agreed that for assessees below the cut-off of Rs 1.5 corers of annual turnover, the Centre will have no control even in respect of CGST, and that it would be outsourced to the States, who would collect the CGST also, in addition to their SGST, and then return t he CGST amount to the Centre. In other words, there will be Single control of the States in those cases.

The concerns have been expressed on this issue as follows:

(a) The decision will have the effect of keeping a section of the taxpayers (i.e. below the Rs. 1.5 Crore cut-off) out of the radar of the Central GST authorities. Will it not be fraught with revenue risk particularly with respect to issuance of fake invoices in the journey of the goods from Single Control to Dual Control areas?

(b) The cut-off of Rs. 1.5 Crores will keep around 92 % of the Service Providers outside Centre's control, and they will be under exclusive control of the States, who have no experience whatsoever in administering Service Tax. Would it not be wiser to keep the Central control side by side with States control so that the States can learn from the Centre's experience?

(c) Can't the concerns of the Small Business about the 'rigors' of Dual Control be taken care of by mitigating administrative measures by the Centre?

(d) If the proposition of giving away the Centre's jurisdiction over assesses below the out- off Rs. 1.5 Crore is accepted, around 92% of the tax base of Service Providers will be outside Centre's control. Consequently, the assessee base for the Centre (read CBEC) would come down sharply from even the existing number. This would bring the huge problem of 'surplus' in the cadre strength of the Central Excise and Service Tax Department. Is there any prior plan for these surplus officers?

(e) The Indian Constitution underlines the supremacy of Centre over the States in three areas- Defence, External Affairs and Finance. Will not outsourcing of Centre's finance work to the States jeopardize this Constitutional position?

Response:

A lot of issues have been raised in the foregoing queries. Personally I consider all these concerns to be valid ones. I have been writing on these issues in TIOL extensively. I am particularly of the view that the concerns of the Small Business about Dual Control can be taken care of my mitigating administrative measures. In order to avoid repetition, and also for the constraint of space, I suggest to please read these articles, links for which are being given here (GST - Duel over Dual Control - Small Taxpayers Unit (STU) may help!)

Besides, a keen reader may also like to read the previously mentioned book on GST authored by me at Pages 331 to 339 and again at Pages 484 to 487. The foregoing issues have been discussed at length in these pages of the said book, I may also mention here that the concerns expressed by the States about 'Dual Control' over Small Business have been palpably diluted when the States have now demanded that the threshold for being under the ambit of GST be brought down from the previously agreed cut off of Rs 25 Lakhs to Rs 10 Lakhs. This demand of States, if agreed to, will being so many more Small Business within the net of GST. So much for the State's sympathy for the Small Business.

[15] Issue/Query

After succumbing to the demand of the States for Single Control by the States alone over the Small Business (below Rs. 1.5 crore turnover) there may be, in future, further demand of the States for Single Control over all the goods and services by the States alone. In that eventuality, the CBEC would be left with jurisdiction only over Customs and a small Excise regime for the goods which remain outside the ambit of the GST. This will lead to drastic reduction of cadre strength of the CBEC, leading further to a huge surplus. Does the CBEC have any contingent plan for that eventuality?

Response:

The apprehension raised here is with reference to the possible demand of the States to have Single (States) GST model eventually in future, where the States would administer and collect even the Centre's share of GST (CGST) and then give it back to the Centre. As mentioned, I could find this model practice only in a section of GST administered at Quebec province of Canada. This model has not found favour in any other country. This model has many obvious flaws. So I don't consider it as a possibility in future. However the Centre (read CBEC) must be on its guard, and any such attempt must be nipped in the bud. Fiscal autonomy for the States does not mean divestment of Centre's authority in taxation matters.

One important development in this context is that while conceding the demand of the States for Single Control by the States over Small Business, the Centre has however insisted that the administering of the IGST for interstate movement of goods and services will have to be under the control of the Centre (read CBEC). Besides other reasons, the Constitution authorises only the Centre to levy tax on interstate transactions. Another important aspect is that the CBEC has been insisting that even in respect of the assessees below the cut-off of Rs. 1.5 crore, the Centre should retain its right in respect of Audit and Anti- Evasion functions. The CBEC must not relent on these critical issues.

In light of the foregoing, one may not have any apprehension in this regard. However, the CBEC will have to be on guard on this issue.

[16] Issue/Query

What would be the structure of the CGST and SGST administrations?Will there be officers of equivalent ranks at CGST and SGST administration?

Response:

Reorganisation of the administrative structures of CGST and SGST will be a big challenge. One thing is clear that the structures of both the administrations have to be uniform. That would mean that the officers of equivalent rank will have to hold the equivalent posts in both the administrations, and their number will have to be same.

At present, the State VAT administrations have only one Commissioner in the rank of Joint Secretary in each State. With the introduction of GST, the GST will subsume elements of Central Excise, Service Tax State VAT and host of other State indirect Taxes. Therefore the workload of the States will increase manifold, and they would also need a huge number of additional officers at each level.

[17] Issue/Query

Because of the fact that there will be huge number of additional posts at all levels of the SGST administration, and that it would be better to have officers with adequate experience in administering indirect taxes, will there be a provision for the officers under the CBEC to go on deputation to State Governments for administering SGST?

Response:

It will be a good idea to have such a provision. While taxation of Goods either on manufacture or sale or supply may have some similarities, the taxation of Services is quite a different cup of tea. Therefore, it would be in the interest of the States to get some officers with experience in Service Tax on deputation from the CBEC, for assisting the States in administering the SGST.

But initiative in this regard will have to be taken by the CBEC by putting up such a proposal proactively at this stage itself.

[18] Issue/Query

How will the rotation of posting of officers, between Customs in Land Customs, Coastal Customs, ICDS etc. (which are now being manned by Central Excise officer) and CGST administration be dealt with ?

Response:

In the post - GST regime, there will in effect be three departments under the CBEC (may be the name will have to be changed). These are - Customs, GST (covering CGST & ISGST) and Central Excise (for the goods outside the ambit of GST). In my view therefore, the officers of the Central Excise (and service Tax) departments will be rotated amongst, the administrations of GST, remaining Central Excise administration and the Customs formations like LCS, ICDS and minor ports s which are now being manned by Central Excise officers. This should not face any difficulty as such.

[19] Issue/Query

In cases where there are disputes between Centre and the State (s) or between two or more States with respect to various issues relating to jurisdiction, violation of agreed rules and regulations, GST rates etc, who will arbitrate such matters ?.

Response:

Originally, it was envisaged that in addition to the GST Council, there would also be an institution named 'Dispute Resolution Authority (DSA ) which would take care of the situations mentioned above along with certain other disputes. The DSA was to be headed by a retired Judge of the Supreme Court or the retired Chief Justice of a High Court and it was to have two eminent members, one each from Centre and the States. The States however objected to this proposal, which also found support from the then Standing Committee of Parliament on Finance. Eventually it was decided that the GST Council itself would deal with such disputes, and for that matter, it will formulate a suitable mechanism.

[20] Issue/Query

Has any thought been given to the Transitional Arrangements for the benefit of the Taxpayers as well as Taxmen?

Response:

Whenever any new scheme is launched in taxation matters, there is always a provision for transitional period. GST is the biggest indirect taxation reform involving the Centre and the 29 plus States. With the introduction of GST, old taxes will be subsumed, or so to say, merged into a new tax. On the date of implementation, the goods and services will be at different stages of the production -distribution - final consumption network. Therefore there will have to be detailed provisions for transitional arrangements. I'm sure the Sub-Committees under the EC will work out a scheme for the transitional period.

[21] Issue/Query

The 'Place of Supply of Goods and Services Rules' being critical in the administering of inter-state movement of Goods and Services, why are these rules not being put in the public domain for the tax-payers to examine and analyse the practicality and feasibility of these rules from a taxpayer's point of view?

Response:

It is learnt from the media reports that one of the Sub committees has submitted the draft 'Place of Supply of Goods and Services Rules' to the E.C. I would expect that after the EC approvers it, the Rules would be put in the public domain for further discussion amongst, not only the tax-payers, but also the taxmen. I may mention that the 'Discussion Paper 'by the CBEC Core Team, referred to in response to the queries at Sl No. 10 and 12 prepages dealt with certain elements of the 'Place of Supply of Goods and Services Rules'. Let us now wait till the aforesaid Rules are put in the public domain before these are finalised.

It is learnt from Newspaper reports that CBEC is not being consulted by the Revenue Headquarters on GST matters. Shouldn't the CBEC actually spearhead the GST policy making decisions and its introduction?

Response:

I agree that the CBEC should spearhead the introduction of GST. But, for that purpose the CBEC has to make it clear that so far as the role of Centre is concerned, it's the CBEC who is the main player. The Revenue Headquarter also has a critical role since it deals with State taxes and it is the interface between Centre and the States . However it cannot be asked to perform the role of the CBEC as well. The leadership in the CBEC will have to sort out this issue with the Revenue Headquarters.

During 2009-10, when Shri V. Sridhar was the Chairman, CBEC, the Chairman with the assistance of Member (Central Excise) i.e. this author and Member (Budget), Shri Y.G. Parande had a say in each aspect of the GST exercises. For example, the 115th Constitution Amendment Bill was drafted by a team comprising the Chairman, Member (Central Excise) and Member (Budget), two joint secretaries in the TRU, Commissioner (Central Excise) etc. from the CBEC, and the Addl. Secretary (Revenue HQ) Shri K. Jose Cyriac . The then Revenue Secretary Shri Sunil Mitra headed the team. The same spirit of cooperation and clear -cut understanding with respect to jurisdiction was maintained when this author look over the charge of Chairman, CBEC. But, things seem to have turned different, as evident from the facts explained below.

The aforesaid Bill was placed before the Parliament in April 2011, and it was immediately referred to the Parliamentary Standing Committee on Finance headed by Shri Yashwant Sinha. The said Committee submitted its Report in August 2013. While broadly agreeing with most of the proposals in the Bill, the Committee suggested changes in certain areas. When the revised Bill was prepared in 2013, based on the recommendations of the Committee, it is learnt that the CBEC was kept out of the loop, and the entire exercise was done by the Revenue Headquarters alone. A Commendable effort by the Revenue Headquarters, no doubt. But, shouldn't the CBEC have been taken into confidence. The then Chairperson gave a statement in 2014 before the Media, clearly stating that the CBEC was not being consulted by the Revenue Headquarters in GST matters. Further, it is learnt that the CBEC is not being consulted even now in the preparation of the Revised Bill which is proposed to be placed before the Parliament in the Winter Session. The CBEC was also not represented when the first presentation on GST was made to the Hon'ble Prime Minister by the Ministry of Finance . Previously, all presentations on GST matters used to be made jointly by the CBEC and Revenue Headquarters.

The CBEC is loosing out on another critical area. Two top posts of GST Net i.e. the Chairman and CEO have gone to the retired officers from the States. The unwritten understanding at the time of setting up the GST Net was that these two posts will be shared between the officers from Centre and the States. If the Chairman was selected from the States, the CEO would be from the Centre (read CBEC). The CBEC will have to take up the matter at appropriate level with all seriousness. As discussed in response to the query at Serial No. 15, an apprehension was expressed that the reins of the CGST administration may also gradually pass on to the officers from the States in future, thus limiting the role of the officers of the Customs and Central Excise Department only to the Customs and the residuary Central excise work. While this apprehension is not considered correct at this stage, nevertheless, one has to be on guard. Therefore, it's now up to the leadership in the CBEC to get back the reins to spearhead the GST campaign.

These are the issues that I considered important and I've given my response to the best of my knowledge, information and ability. As the work on GST progresses, there may be more queries which would be responded to at the appropriate time.

[The author is former Chairman, Central Board of Excise and Customs. He is also the author of the book titled "GST in India-its travails, tribulations and challenges ahead"]