Know your Ministry - No. 23 - Finance: Department of Revenue

One of the five critical wings of the Finance Ministry is the Department of Revenue. It functions under the overall direction and control of the Secretary (Revenue) and exercises control in respect of matters relating to all the Direct and Indirect Union Taxes through two statutory Boards namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). Each Board is headed by a Chairman who is also ex-officio Special Secretary to the Government of India. Matters relating to the levy and collection of all Direct Taxes are looked after by the CBDT whereas those relating to levy and collection of Customs and Central Excise duties and other Indirect Taxes fall within the purview of the CBIC. The two Boards were constituted under the Central Board of Revenue Act, 1963. At present, the CBDT has six Members and the CBIC has six Members. The Members are also ex-officio Special Secretaries to the Government of India.

Department of Revenue administers the following Acts:

GST Act, 2017; CGST Act; CGST (Extension to Jammu And Kashmir) Act 2017; 101st constitution amendment act 2016 ; IGST Act; IGST (Extension to Jammu And Kashmir) Act 2017; GST (Compensation To The State ) Act; The Central Good And Services Tax Act 2017; The Good And Services Tax (Compensation To The State) Act 2017 ;Integrated good and service tax act 2017; Income Tax Act, 1961; Union territory good and service tax act 2017; Constitution (One Hundred and first amendment ; Wealth Tax Act, 1958; Expenditure Tax Act, 1987; Prohibition Of Benami Property Transaction Act 1988; Prevention of money-Laundering act 2002; Black money (undisclosed foreign income And Assets) and imposition of Tax Act 2015; Super Profits Act, 1963; Fugitive Economic offenders Act 2018; Securities Transaction Tax Commodities Transaction tax ; Companies (Profits) Sur-tax Act, 1964; Compulsory Deposit (Income Tax Payers) Scheme Act, 1974; Chapter VII of Finance (No.2) Act, 2004 (Relating to Levy of Securities Transactions Tax); Chapter VII of Finance Act 2005 (Relating to Banking Cash Transaction Tax); Chapter V of Finance Act, 1994 (relating to Service Tax); Central Excise Act, 1944 and related matters; Customs Act, 1962 and related matters; Medicinal and Toilet Preparations (Excise Duties) Act, 1955; Central Sales Tax Act, 1956; Narcotic Drugs and Psychotropic Substances Act, 1985; Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988; Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976; Equalization levy with Rules; Indian Stamp Act, 1899 (to the extent falling within jurisdiction of the Union);  Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974; Foreign Exchange Management Act, 1999; and Prevention of Money Laundering Act, 2002.

Allocation of Work is broadly divided into the broad Divisions of Revenue HQ, Central Board of Direct Taxes (CBDT) and Central Board of Excise & Customs (CBEC)

Major Activities: Foreign Exchange Management, Narcotic Drugs & Psychotropic Substance, Prevention of Money Laundering, E-Activities, Data & Statistics (Income tax eFiling & Daily Customs Revenue/Drawback Reports)

Taxes : Central Tax (Direct Tax, Indirect Tax, Central Tax Collections), State Taxes (Central Sale Tax, Empowered Committee of State Government, Goods & Services Tax, IT Initiatives, Stamp Duty & Value Added Tax) , Indirect Tax Ombudsman, Settlement Commission & Revision Application(RA) Units.

CHALLENGES BEFORE THE DEPARTMENT OF REVENUE

• Transformation to the new GST regime due to constraints in built for its effective implementation.
• Legal constraints involved in dealing with economic offence matters due to delay and pendency accrued on account of burden and workload on the judiciary.
• Administration and enforcement of laws related to Revenues due to involvement of multiple agencies and stakeholders attached in the department’s domain..
• Deficiency in the professional skillsets and necessary skillsets of human resources.
• Due to availability of large unorganised sectors and many income sources including agriculture still stay outside the ambit of tax due to clear lack of clarity to expand the tax net into excluded or omitted sectors.

WAY FORWARD

• Explore large scale Tax Reforms on large scales headed by a dynamic leadership to ensure that no sector enjoys ineligible privileges to stay out of the tax net in the name of exemption or rebates.
• Ensure that the tax slabs under the GST is simplified to the core so that commodities are scientifically evaluated through proper assessment and ground level survey and analysis of items duly categorised only under two broad categories viz Essential and Non-essential segments.
• Include all petroleum products under the GST regime to generate revenues for the State and end-use consumers are directly benefited instead of few Capitalists exercising monotony in this business.
• Identify all types of tax evaders deploying a robust technology that would also ensure utmost transparency in the Revenue Input infrastructure.
• To overcome all technical glitches emanated under the new tax collection regime and establish a robust technology framework that would restore trust and confidence of citizens.