People@Work

A tale of two Boards — to merge or not to merge

Richa Mishra | Updated on July 15, 2020 Published on July 15, 2020

No moves to make CBDT and CBIC one entity, says govt. But why has the talk surfaced?

Denials always lead to more debate. It was no different when the Finance Ministry, on July 6, issued a strong rebuttal against a news report on the merger of the two Boards of Revenue – the Central Board of Direct Taxes and Central Board of Indirect Taxes and Customs.

The ministry categorically denied that there was any proposal to merge the two Boards.

However, acknowledging that the “said merger was one of the recommendations of the Tax Administrative Reforms Commission (TARC)”, it said the TARC recommendation was examined in detail by the government and not accepted.

The news item and the denial sparked off discussions. If there was no such move, what was the trigger for the news report, especially as the government has been talking about a leaner bureaucracy? NITI Aayog’s Strategy for New India @75 proposes reducing number of civil services.

Within the service, the feeling is that once upon a time this proposal may have made some sense but today, with the indirect tax regime undergoing a complete overhaul, there is no merit in this argument. Further, Customs does not gel with the CBDT and hence will have to be administered separately.

As Vanaja N Sarna, the first chairperson of CBIC and now Commissioner, Central Information Commission, points out, “We have come a long way since we had a Central Board of Revenue. Today, you are talking about two big services that have large work forces and clearly laid-out job profiles.”

She adds, “We may be sister concerns, but the laws that govern us are different. So, I personally feel that personnel-wise it would be troublesome.” She feels that if you merge two boards that comprise seven members each into a shrunken entity, then you deprive people of their positions.

There are lots of issues that will need to be addressed even when merging the boards of these two services — who will become the chairman of the board, will it be by rotation, how fair will it be, which service will be called first, etc.

“This will also create service rivalry. Also, once the board is common, then basically you are going to merge the services. So, will you then treat them as two different wings with a common head? Also, the Goods & Services Tax regime has already led to major restructuring — even the State services have come on board now. So you have GST officers, you have customs officers, you have income tax officers. It is already complex enough,” she says. If the rationale for the move is to cut expenses, then critics point out that more than any financial benefits there could be problems that could crop up.

Says R Manimohan, Secretary General, All India Association of Central Excise Gazetted Executive Officers (representing superintendents of Central Excise, GST and Customs all over India), “Successive governments have been trying to reduce expenses and one easy thought has been to merge services. But, practically, merger could have field-level problems due to different types of formations functioning in the field for each form of tax and also different services being recruited through different methods over a period.”

While at the higher administrative level, it may not create much problem because essentially all are doing administrative and quasi-judicial work, irrespective of the nature of the law being enforced, the field posts are different, he says. “While CBDT does not need much field formations, CBIC requires them. Central GST enforced by CBIC is comparable with State GST rather than CBDT.”

Some services feel it is best not to react and let the topic die its own death.

Though the Finance Ministry has categorically denied the report, a discussion within the services is that when in normal times the TRC report proposal was not accepted, why is it being raked up now? Is it to test sentiments?

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Published on July 15, 2020
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