Come April, spies will snoop on tax evaders

Under the new goods and services tax (GST) regime that will roll out from April 1, 2017, the government is looking to rename the Directorate-General of Central Excise Intelligence (DGCEI) as the DGGSTI (Directorate-General GST Intelligence) to detect and deter indirect tax evaders.

The DGGSTI will have six new zones by upgrading the regional units in Jaipur, Ludhiana, Bhubaneshwar, Vizag and Kochi besides setting up an entirely new zone in Patna. There will be eight more regional/sub-regional units through which the footprint of the intelligence body will be increased. In effect, each state will have one unit of DGGSTI, which means more recruitment to conduct intelligence work to detect evaders.

The proposal is part of a working group plan on re-organisation of manpower and staffing for the new GST regime. Accordingly a power-point presentation, accessed by this newspaper, was made during the working group’s meeting that took place on October 3.

Currently, the DGCEI is the apex intelligence agency under the Central Board of Excise and Customs (CBEC) created “to frustrate and deter the continual attempts of tax evaders to evade central excise duty and service tax”.

The GST regime seeks to do away with the complicated system of various levies, like octroi, excise duty, service tax, value-added tax, entertainment tax, entry tax and luxury tax, and replace it with one single tax. The indirect tax assessee base in India is about 120 lakh, excluding traders whose turnover is less than Rs 1.5 crore per annum.

The working group has also suggested the abolishment of large taxpayer units (LTU), which are being seen as having failed to deliver.

Set up in 2005, LTUs act as a “single window” mechanism for high net-worth taxpayers. The LTU platform is an optional one where many large taxpayers stay out fearing greater probity and scrutiny.

Already there is considerable apprehension among high net-worth taxpayers about the implications of the GST and the protocols it will follow once it rolls out in less than six months.

In the past, two committees — one led by Parthasarathi Shome on tax reforms and another by the Directorate of Revenue Intelligence (DRI) — had looked at the working of LTUs and had suggested a revamp.