JANUARY 23, 2019

By Vijay Kumar

Are GST officers required to wear uniform?

RECENTLY, an Assistant Commissioner of Central GST issued an Office Order,

It has been observed that all the Inspectors posted in the Division are regularly been drawing uniform allowance as per the norms prescribed. However, none of the officers were wearing the same; the same was also observed by the Joint Commissioner. during his visit / inspection of Division on 05.12.2018 at 16:00 hrs.

All Inspectors are directed to wear proper uniform during office hours regularly.

Are the CGST officers required/allowed to wear uniforms?

Immediately after GST came into force, on 13.07.2017 an RTI question was asked, "Under which Rule of GST or otherwise Central Excise officers are wearing uniform after 01.07.2017?"

And the CBEC replied, "The rule governing the wearing of uniform by Central Excise Officers has not changed after 01.07.2017."

This is a reply given by the Apex Board! Is there really a rule governing the wearing of uniform by Central Excise Officers, and if so, what is it/where is it? Nobody seems to know.

More than eight years ago in DDT 1414 on 02.08.2010, I wrote:

One of the relics which the Central Excise and Service Tax Department should perhaps get rid of in the GST regime is the funny uniform that you see Inspectors, Superintendents and Assistant Commissioners in.

In a recent order, the CENTRAL INFORMATION COMMISSION, observed, "It is seen that the CBEC has not formulated clear guidelines about the use of uniform by officers, Equipment Advances and its relationship with the uniform usage, etc. Apparently, these rules did exist a long time ago before Independence and had been followed more in the form of conventions than any set written directions. Now that this point has been raised, CBEC may consider issuing detailed and clear guidelines in this regard."

This order was given by the Commission in January 2010 and apparently, so far nobody in the Board has considered this issue. This should be an important issue for consideration for GST Implementation-It will be ridiculous if the CGST officers wear uniform and the SGST officers don't. Any way the uniform in Central Excise commands more ridicule than respect.

Sometime back Dr. DD Rishi, Commissioner of Customs and Central Excise (now retired), writing in the irs online observed,

"About 27 years ago, while being posted as the Senior Superintendent of Central Excise, I was attending a meeting with the Commissioner. I saw another Senior Superintendent there. To my surprise she was wearing an Ashoka Emblem along with a star on her shoulder while I was wearing only an Ashoka Emblem. "Madam, Senior Superintendent's uniform should have only the Ashoka Emblem while that of Assistant Collector (now Assistant Commissioner) has a star in addition". "Is it so? But nobody told although I have been wearing it for last one year!" "Are you sure?" "I am not sure but I think so.". "OK, then, let us be uniform", she stripped the star off her shoulders mercilessly. A sacrifice for the sake of uniformity of uniform.

Recently I was attending a function organized for Presidential Awards in Delhi. Some of the awardees were wearing uniforms while others were wearing what they considered to be "uniform". Anyhow, no two uniforms matched in colour, shade or style. But that is what we call 'Unity in Diversity'. Yesterday, from the latest batch of probationers, some were wearing Ashoka Emblem plus a star, while others were wearing just a star. Those wearing just a star explained that they had been under the impression that they could wear Ashoka Emblem plus a star only on completion of their probation. I don't know who will make the sacrifice for the sake of uniformity of uniform this time.

Impressions determine the rules. And the impressions are as mysterious as the uniform of a uniformed service."

Let us not take this archaic joke into the GST.

Uniform for these officers was introduced sometime in 1938 and there never was any uniformity in these uniforms. Nobody really knows why, under what authority and what kind of uniforms are to be worn by these offices.

The Task Force on Indirect Taxes (Kelkar Committee), as early as in 2002, vide Chapter-7 Para 6.11.1 (i) observed;

"(i) Central Excise officers should not be required to wear uniform. This would change the mindset on both side (Department and taxpayer) and contribute to freer communication."

Recently, the issue was again raised in RTI query with the CBIC. These are the questions and the answers given by the Board on 10th and 17th January 2019.

In another RTI question a year ago, to a GST Divisional Officer, it was stated,

In GST regime, government is trying to portray itself as tax payers friendly and is urging us to become more tax compliant. However on the contrary they are continuing Khakhi uniform in central excise department, which in itself is sufficient to instill fear in taxpayers, as it is like police uniform.When Government is trying to stop VIP culture in country still officers of Central Excise come along with uniformed officer.

These were the questions and the answers:

Yet another paradox of the Simple Tax is that the Central GST officers have uniforms, while State GST officers manage the same set of laws with less hum our and no uniform.

Long ago, I asked Swamy Chinmayananda, "why do all sadhus wear the saffron uniform and who prescribed that dress code for them?"

The Swamiji replied that it is only for identification and there is no manual as such.

The way bill Story:

The way bill was introduced at the time when multi point taxes in the form of the general sales tax Acts were in force. States were taxing only goods and not services. Road transport operators were out of their tax net. These operators were, therefore, not accountable to the sales tax departments on whether they were transporting tax paid goods or not. The way bill was conceived as an instrument to indirectly bring the activities of both the transport agencies as well as ‘zero business' traders under control by requiring that movement of all tax paid goods must be accompanied by a way bill issued by the sales tax department. Theoretically, this closed opportunities for transport agencies as well as dealers to move tax evaded goods.

The way bill forms were issued in books containing a number of leaves (like a cheque book) to a dealer by the Commercial Tax Department under its seal. It was to be used when the dealer needed to transport goods to the purchaser. The way bill forms were required to be filled up with details of the consignor/ consignee, the description, quantity and value of the goods, the type of transaction and invoice number or delivery challan number. It was also required that after the journey was completed, the way bill be surrendered to the commercial tax officer who had jurisdiction over the dealer who had purchased the goods. The way bill thus sought to control tax evasion in a three pronged manner as follows.

1. The selling dealer was accountable to the Commercial Taxes Department for the way bills he had used for transportation and the invoices related to these way bills. He would thus find it difficult not to report these sales in his return and would have to pay tax on all these sales.

2. All goods in transit were liable for inspection to ensure that they carried a way bill. This would ensure that the goods being transported were goods on which tax had been paid and tax evaded goods were not transported.

3. At the destination, the way bill was to be surrendered to the Commercial Tax officer in that jurisdiction. This was to ensure that the dealer at the destination could not under report receipts and avoid taxes on sales made.

Though the theory behind the need for using way bills was impeccable, a number of problems were encountered in practice.

1. First, selling dealers often reused way bills if the goods in the transport vehicles were not checked enroute . In collusion with the purchasing dealer, this transaction could then be conducted totally off the record, also known as zero business. No tax was paid on such transactions since they were suppressed.

2. Second and more importantly, the system gave a licence to officials of the sales tax departments to intercept transport vehicles (including passenger cars which were often used to transport high value items like drugs, jewellery etc.) at any location and verify the cargo they were carrying. There were frequent allegations of both harassment and corruption against department officials.

3. Third, receiving dealers either did not submit the used way bills to the commercial tax officer, or the latter did not insist on it, so that the purchasing dealers had leeway to under report their consequent sales .

4. Fourth, there were allegations of corruption even in the issue of way bills to the indenting dealers.

Many States sought to address these problems through the use of an electronic way bill. The e-way bill was generated online by the dealer through his dedicated account on the department's web site. This removed the interface of dealer with the department for the issue of way bills .The department would have a record of the number of bills he was using. It also constrained the re-use of way bills since full details were printed on the way bill including date of despatch, vehicle number used for transportation, distance etc. and a record of these entries was available with the department. But even the e-way bill could not address the second and third problems listed above-the alleged harassment and corruption of checking officers and the destination dealer not submitting the used way bill to the commercial tax officer allowing him to misreport his purchases.

This is from a paper "Reforming the GST - Do we need the e-way bill" by V. Bhaskar and Vijay Kelkar.

The e-way bill rode into the GST and is really blocking the roads of the Republic .

Happy Republic Day