Finance Ministry raps central tax officers for poor GST show

New Delhi: The finance ministry is not happy with the central government officials who lag behind their counterparts in state governments in GST collection. The poor performance of the central workforce has forced the finance ministry to issue a missive asking them to pull up their socks and prove that they are better than their state government counterparts.

Finance secretary Hasmukh Adhia, in his latest communication, has shared a comparative analysis of state and the central government employees in GST collection as provided by the online platform GSTN.

He said the performance of central government officials in all states except Arunachal Pradesh is lower than the state employees’ in filing of returns for April (up to May 26, 2018). Even on the count of average growth of tax collection in April over January and February, the central government has performed worse than their counterparts in the states, except for couple of states.

The only aspect in which the central government officials have fared well is in sanctioning of refund but the finance ministry has found it mysterious that the rate of refund sanctioned can be more than the claim shown in Jammu and Kashmir, Meghalaya, Daman and Diu, Dadra and Nagar Haveli and Tamil Nadu.

The finance secretary wants all senior ministry officials to immediately review the work of central government officers and ensure that their performance is superior to those of state governments.

In the GST system as administrative control of the taxpayers lies with both the centre and the states, a clear division of work has been worked out by the GST Council and allotment made on the basis of a computer draw in states.

There is a broad formula for cross-empowerment under which 90 per cent of the small taxpayers with an annual of less than Rs 1.5 crore would be under the administrative control of states. The remaining 10 per cent are with the Central tax administration.

Similarly, all administrative control of larger taxpayers above Rs 1.5 crore turnover has been divided equally in the ratio of 50 per cent each for the central and the state tax administration.

For the purpose of turnover, those registered under value added tax (VAT) or/and central excise, their state turnover, including inter-state transactions, will be taken into account. For those registered only under central excise and not VAT, the annual turnover given in central excise returns will be taken into account. Those registered under VAT and service tax will be considered on the turnover given in the returns for both, the overlap being excluded. For those registered in only service tax, their turnover in these returns will be taken for the division.

But irrespective of the division, the new tax systems has placed a lot of central tax officials at the state level sharing space directly with their state counterparts.

Despite the proximity, GST has created a competition among officers and the collection at the end of every month becomes a matter of pride for all. After registering its highest GST collections of Rs 1,03,458 crore in April, the revenue has fallen to Rs 94,016 crore in May.

Out of this central GST collections made up Rs 15,866 crore, state GST Rs 21,691 crore, integrated GST Rs 49,120 crore (including Rs 24,447 crore collected on imports) and cess collections stood at Rs 7,339 crore. 

The total revenue earned by the central Government and state governments after settlement in May 2018 is Rs 28,797 crore for CGST and Rs 34,020 crore for the SGST.