Employees of Commercial Tax Dept under the State Govts to go on Strike on October 15

Employees of Commercial Tax Dept under the State Govts to go on Strike on October 15

Employees of Commercial Tax departments, under the State governments, will go on strike on October 15 if their demand to be allowed to monitor and collect Service Tax, under the Goods and Services Tax (GST) regime, is not addressed. Almost two lakh employees of Commercial Tax departments will go on strike in October if the issue is not addressed in Friday’s GST Council meeting, the All India Confederation of Commercial Taxes Association (AICCTA), said on Thursday.

In the first meeting of the newly constituted GST Council last week, Finance Minister Arun Jaitley announced that the officers of the Central government would exclusively monitor Service Tax assessees under the GST regime. However, earlier, during all the deliberations of the Empowered Committee of State Finance Ministers it was decided that all taxpayers below the annual turnover threshold of Rs.1.5 crore would be monitored by the officials of the respective State’s Commercial Tax department. A large component of Service Tax assessees are below the Rs.1.5 crore threshold. By reducing the area of operations of the officers of Commercial Tax, which is the key source of revenue for the States, the GST Council was trying to “strangulate” the tax departments in the States, AICCTA officials said.

Lower workload?

“Suppose, in Kolkata, officials collect tax from four lakh assesses (dealers), then the number would reduce to one lakh or less as the Central government would be monitoring it from Delhi thus downsizing the department, which essentially means termination of employment,” said the national president of AICCTA, K.R. Suryanarayana from Hyderabad. Besides, in the long run, it would reduce the earning of the State governments, he said. “Many service sectors – like the contractual work – and many upcoming sectors will be monitored by the Central agencies which are now monitored by the State governments. It would severely affect the revenue collection of the State governments,” Mr. Suryanarayana told The Hindu on phone.

The office-bearers of AICCTA have sought an appointment with the Revenue Secretary to explain their concern. “The reasoning that state commercial tax officials do not have expertise in handling the Service Tax administration is ridiculous,” he said.

Trust deficit

“If the said reasoning is acceptable, then it would equally apply in the case of central authorities in the case of handling of ‘inter state transactions’ (IGST). With this decision, the true spirit of GST reform will get defeated and the States’ domain will remain limited to only Goods Tax, which is not the intended spirit of the 122nd constitutional amendment. It seems to be a trust deficit on the States and it is also about denying the States their Constitutional right,” he said.

On Friday, State Finance Ministers will likely air their concerns in the Council.

Source: The Hindu