PROPOSED ADMINISTRATION OF GST (PART-II)

[Dr. Sanjiv Agarwal]

Audit under GST

Audit function will be under the Member (L&J, Audit) of the Board to whom DG Audit, Directorate of Legal Affairs, Principal Chief Commissioners of Regions, Authorized representatives of Tribunal / Settlement Commission / Advance Ruling etc and  Appellate Commissioners will report.

The Appellate Commissioners would be reporting to Regional Principal Chief Commissioners for administration and would be reporting to Member for legal issues. The Authorized Representatives (AR) will report to Chief Commissioner and      below. As legacy pendency will be very huge and due to new tax regime, in initial years, chances of litigation will be very high. To mitigate this, it is suggested that benches of tribunals may be created in each states and to wipe out legacy issue power of single bench may be increased up to ₹ 5 crore.

The Directorate General of Audit will have under it specialized regional audit units. The audit done by this Directorate will be 360 degree Audit in all respect which will cover GST and Customs. It will increase ease of doing business for bigger assesses who have presence in multiple locations.

Powers of Board / Commissioner

The Board or Commissioner are empowered to –

1. appoint officers
2. assign the functions to the officers
3. make regulations on any provisions of the Act on recommendation of GSTC
4. delegate the powers to officers, subject to conditions and limitations

Operations and Administration

Under GST, there can be 5-7 regions in India i.e. North, South, East, West, North-East and Central regions which will be headed by Principal Chief Commissioner and regions would be divided into GST Zones and Customs Zones. Both zones / territories may be co-terminus with the States / UT of India. Further, Principal Chief Commissioner would be the Cadre Controlling authority. These zones will be for GST  and Customs.

It is expected that each GST zone will have following type of Commissionerates-

1. GST Commissionerate
2. Central Excise  Commissionerate & Legacy Commissionerate
3. Customs Commissionerate

Zone will be headed by the Chief Commissioner. For better coordination between Centre and States, it is suggested that there will be Apex level and Zonal level Coordination Committee. Principal Chief Commissioner of respective zone and Chief Secretary of States would attend the meeting of apex level committee. Commissioner CGST / IGST and Commissioner SGST will attend the Zonal coordination meeting which will be headed by Zonal Chief Commissioner. GST Commissionerates will further be divided into sub-commissionerates with GST Divisions and Anti-Evasion Wing.

Each GST and Central Excise Commissionerate would be headed by Commissioner. It would have 30 divisions on average. The Anti-Evasion Wing should work from the Commissionerate Head Quarters. The Commissioner shall also liaise with the Commissioner SGST for intelligence sharing, joint-audit, if state so wishes, joint actions, report and statistics etc. The Commissionerate can have State officers on deputation as well. Any issue of mutual importance can be discussed with the Commissioner SGST by the Commissioner CGST and plan of actions can be worked out. The Sub-Commissionerates would be headed by Additional Commissioner/Joint Commissioner who would head 10 divisions on an average.

GST Divisions will further have ranges. It is expected that each Division shall be approximately the size of the district. Further, there may be more than one divisions in a district as well if the number of assesses in that district are more than 5000 i.e. the divisions would be as many as multiples of 5000 or may coincide with the block. This is for close engagement with trade. This number is subject to revision. The Division would be headed by AC/DC and can have staff on deputation from the State, subject to a maximum limit of 15-25%. The functions of the Division would include report of taxes paid, refund given etc., levy and collection of CGST and IGST,  stuffing of export containers, refund/rebate for exports, audit, help desk for assesses, aiding the SGST officers in case of joint audit, joint action, etc. The Division head shall report to Commissioner SGST and Additional Commissioner / Joint Commissioner as well whereas the reporting to Commissioner SGST would be for operational requirements, report and data submission. The appraisal would be for 360 degree appraisal. Ranges would be co-terminus with 1000 assessees per 20 sq km area as the case may be. It would be headed by Superintendent.

Adjudication of  Cases

The duly appointed adjudicating authorities shall adjudicate the matters other than appeals in the GST regime. As per section 2(4), 'adjudicating authority' means any authority competent to pass any order or decision under this Act, but does not include the Board, the First Appellate Authority and the Appellate Tribunal. Thus,  adjudicating authority would exclude the Board itself (CBEC or CBIT) and appellate authorities viz, First Appellate Authority and Appellate Tribunal.

Officers under GST

Under GST regime, Commissioner of GST would include –

1. Commissioner of CGST
2. Commissioner of SGST
3. Commissioner of IGST

appointed under the CGST Act/ IGST Act. Section 4 of the CGST Act and Section 32 of the IGST Act provides for officers to be appointed under the law.        

Such person shall be considered as proper officer for the function (s) assigned to him under the Act by the Board or Commissioner, as the case may be. For example, an officer may be assigned adjudication of a particular show cause notice.

As per section 4, following classes of officers shall be there under CGST, SGST and IGST -          

Under CGST:

1. Principal Chief Commissioners of CGST or

Principal Directors General of CGST,

2. Chief Commissioners of CGST or

Directors General of CGST,

3.  Principal Commissioners of CGST or

Principal Additional Directors General of CGST,

4. Commissioners of CGST or

Additional Directors General of CGST,

5.  First Appellate Authority,
6.  Additional Commissioners of CGST or

Additional Directors of CGST,

7. Joint Commissioners of CGST or

Joint Directors of CGST,

8. Deputy Commissioners of CGST or

Deputy Directors of CGST,

1. Assistant Commissioners of CGST or

Assistant Directors of CGST, and

10.  such other class of officers as may be appointed for the purposes of this Act.

Under SGST:

1. Commissioner of SGST,
2. Special Commissioners of SGST,
3. Additional Commissioners of SGST,
4. Joint Commissioners of SGST,
5. Deputy Commissioners of SGST,
6. Assistant Commissioners of SGST, and
7. such other class of officers and persons as may be appointed for the purposes of     this Act. [List is indicative]

Under IGST:

1. Principal Chief Commissioners of IGST or

Principal Directors General of IGST,

2. Chief Commissioners of IGST or

Directors General of IGST,

3. Principal Commissioners of IGST or

Principal Additional Directors General of IGST,

4. Commissioners of IGST or

Additional Directors General of IGST,

5. First Appellate Authority
6. Additional Commissioners of IGST or

Additional Directors of IGST,

7. Joint Commissioners of IGST or

Joint Directors of IGST,

8. Deputy Commissioners of IGST or

Deputy Directors of IGST,

1. Assistant Commissioners of IGST or

Assistant Directors of IGST, and

10. such other class of officers as may be appointed for the purposes of this Act.

The Board or Commissioner may authorize some other officer / delegate powers as provided in the law. However, the first appellate authority shall not discharge duties or exercise powers other than those in relation to appeals.

It may be noted that the ranks of officers mentioned above are indicative or illustrative only and there may also be other class(es) of officers.