Finance Ministry pulls up officers of I-T department for poor GST mop-up

The finance ministry has pulled up officers of the indirect tax department for their supposedly inadequate performance in collecting the goods and services tax (GST), which is shortly going to complete a year.

It has also described as a “mystery” as to how officers, especially in Tamil Nadu and a few other states, have given more refund than the tax collected for April 2018.

The assessment comes hot on the heels of the report card on GST collections released by the finance ministry this week.

GST receipts for the month of May have slipped to Rs 940 billion against a target of Rs 1 trillion set for each month of 2018-19.

That the dip has caused consternation in the government is evident from the unique exercise. 

With the data from the GSTN platform, the department of revenue has measured the performance of a cohort of officers under the central government vis-a-vis those in state governments. 

The first group comprises officers of the cadre of Central Excise, Service tax and Customs, while those in state governments are mostly drawn from the Indian Administrative Service and state civil services.

This is the first time the government itself has done this exercise. Till the GST was rolled out, it was in any case not possible to make such comparisons since there was only one category of tax to be collected by any group of officers.

That picture has changed with the introduction of the GST. The results of the ranking exercise were released on this week by Finance Secretary Hasmukh Adhia. It notes, for instance, “in the growth of tax collection … we can see that the performance of central government officers is worse than the state government officers, except in a couple of states”.

The detailed state-wise report has been circulated among all officers and is expected to invite scrutiny of the officer groups for their slack. 

It has asked for a review of the performance of central government officers “to make sure” their performance is better than that of their peers in the respective state governments. 

The comparison sheet measures the performance of central and state government officers on three metrics: The number of returns filed for the month, growth in tax collection, and refunds. 

On refunds, the sheet makes a scathing observation that “it is a mystery that rate of refund sanctioned can be more than the claim as shown by central government officers in case of J&K, Meghalaya, Daman and Diu, Dadra and Nagar Haveli and Tamil Nadu”. 

The finance secretary’s missive is likely to cause discomfiture among indirect tax officers of the central government because they are primarily trained for this job. In the run-up to the GST, it was frequently argued by their officers’ body that tax receipts under the GST would trail that of the erstwhile excise and service tax since officers of state governments were not trained to handle the complexity of the new tax.

Central Board of Indirect Taxes and Customs (CBIC) Chairperson Vanaja N Sarna has written to field officers, asking them to pursue those not filing GST returns. 

In this respect, she asked zones to follow the example of the Bhubaneshwar zone. The zone had sent notices to 10,000 assessees for non-filing of GSTR-3B in this regard till May 28.