The Central Board of Excise and Customs (CBEC) is planning a first-of-its-kind manpower-sharing exercise with states under the goods and services tax (GST) regime.

The blueprint drawn up by the central government’s indirect tax wing envisages employing state GST officials in central tax evasion and intelligence wings on deputation.

Similarly, it also proposes to send central tax officials to the state GST administration, subject to the latter’s approval.

If implemented successfully, it will further aid the move towards cooperative federalism, but may prove to be a challenging task, given the current distrust between the tax authorities.

GST aims to remove barriers across states and unify the country into a common market.

It will replace most of the indirect taxes levied by the centre and states, including excise duty, service tax, value-added tax (VAT), entertainment tax, luxury tax and entry tax.

It will also require massive coordination between the centre and the states as the tax base will now be unified.

To begin with, it is proposed that state commercial tax officers who have expertise in state VAT laws be deputed to the proposed Directorate General of Indirect Tax Intelligence, which will replace the Directorate General of Central Excise Intelligence in a GST regime and handle all economic frauds and offences related to taxation.

It is also proposed to have state officers on deputation in GST commissionerates that will be set up zone-wise.

With the restructuring of the CBEC also on the anvil because of the transition to GST, the board envisages sending excess staff to state administrations, subject to assent by states.
The CBEC is decided to  depute mostly Audit staffs of Central Excise and Service Tax  to States to conduct proper Audit under scientific way as Audit wing of CBEC is well conversant with scientific Audit. In the other hand CBEC will procure staffs of flying/ vigilance  squads of States VAT department  to strengthen its intelligence wing. 

“We are discussing a number of steps on how the administration can be restructured. Increasing the cooperation with state tax authorities is also being discussed,” said a finance ministry official who did not wish to be identified.

But this may be easier said than done.

There are still many points of disagreement between the centre and states.

While the states are seeking exclusive administrative control over traders with a revenue threshold of less thanRs.1.5 crore, the centre is reluctant.

The latter also favours a threshold of Rs.25 lakh for exempting traders from GST, while some states favour a lower Rs.10 lakh threshold.

All these issues will be decided by the newly formed GST council, which will hold its first meeting next week.

“States will face a manpower shortage in the GST regime because they only administer the VAT laws till now. The officers from the centre can be sent on deputation to the states,” said S.D. Majumder, former chairman of the CBEC.

“Also, state government officials have no experience in dealing with services while the central tax authorities have experience in dealing with both goods and services,” Majumder added.