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Restructuring CBIC: Vacancies provide an opportunity to relook at appointments

Date: 05-08-2020
Subject: Restructuring CBIC: Vacancies provide an opportunity to relook at appointments
The Central Board of Indirect Taxes (CBIC) has seen a spate of retirements in the last few months, leaving open five vacancies, with only one member and chairman remaining. Finally, three new members were appointed on August 3. Earlier this year, about 15 officers had been called for interviews by the Cabinet Secretary as part of procedure, now mandated by the Committee of Secretaries, for onward transmission to Appointments Committee of the Cabinet. It took about six months from that point to appointment. Again, seniority played a big role. One of the members has just six months left for retirement.

The CBIC is the apex organisation for the IRS (Customs & Central Excise), comprising 5,600 IRS officers and over 52,500 superintendents and inspectors. Across all these cadres, there are a huge number of vacancies. The IRS cadre is said to be short by over 2,000 officers, while other executive levels have over 18,000 vacancies.

When uplifting GST revenue is the topmost national economic priority for regaining fiscal balance, the indecisiveness in filling up vacancies doesn’t add up or support this hope. The CBIC is responsible for collecting over Rs 4 lakh crore of tax revenue through imports and as much under GST and central excise. Going by the press releases, GST evasion and under-invoicing in import are rampant. In fact, last two years saw a huge spurt in detection of cases of fake invoicing and tax evasion. As per replies given by MoS (Finance), evasion of Rs 37,946 crore was detected in 2018-19 alone, while overall detection in last two fiscal years is said to be Rs 70,206 crore. Going by the usual metric of detection vis-à-vis evasion, actual tax evasion may well be between Rs 3.5 lakh crore and Rs 7 lakh crore since the advent of GST. Given the extent of fraud and a huge tax base of 1.25 crore taxpayers, there is an imperative for two things—good people and robust technology.

Now why the government should go short on people is baffling. Who is responsible for recruitment? Although selecting members of the board may require the active intervention of the highest office, shortage of thousands of officers can only be attributed to inefficient administration by the board.

This brings us to the Central Boards of Revenue Act, 1963, which constituted the Central Board of Excise and Customs. Section 4 of the Act laid down the procedure for the functioning of the board. The central government may make rules for the purpose of regulating the transaction of business by each board, and every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the board.

Now, 56 years have gone by and no rules for functioning of the board have been drafted till date. Bureaucracy never likes to bind itself with procedures, rules and need for board resolutions. As such, there is no discipline in exercise of powers by and of the board. A member may well be the board or a combination of member and chairman go on to become the ‘board’, as they may find convenient. Legally speaking, all regulations and circulars issued by the board can be challenged on the ground that due rules for functioning of the board were not followed.

Good governance warrants that the government immediately issue rules under the CBR Act and bring discipline alongside KPIs for functioning of the CBIC. It would be the first step towards bringing transparency and accountability for the goings-on in the board. The vacancies also provide an opportunity to relook at appointments. The government should reconsider the system of selection on concept of mere seniority, as it has in defence services, etc. As in the case of appointments in central ministries, a system of throwing open the selection to all Chief Commissioners should be followed. Too many officers have walked into the North Block on the basis of seniority and made a mess. Neither did they have prior experience in policymaking, nor exhibited flair for such a job. Going just by date of birth or being in the field is no qualification for working in the ministry. Recently, per newspaper reports, an IAS officer shall not be empanelled at JS level unless the officer has done a stint as DS/director in government of India. Why a similar dispensation should not prevail for the Central Boards for Direct and Indirect Taxes?

Taxpayers must have a right to expect a selection of a bunch of officers who shall bring a modicum of talent and common sense. Tax person is no longer a collector, but a facilitator.

Source:- financialexpress.com

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