Directorate General of Systems & Data Management, CBEC Scheme of the Presentation Scheme of the Presentation A. Past Year’s Performance B. Current year’s Revenue challenges C. The GST Challenges

Directorate General of Systems & Data Management, CBEC A. Highlights of the Past Year

Directorate General of Systems & Data Management, CBEC Past Year’s Revenue Performance Tax Head B.E R.E Actual %RE achieved Shortfall/G ain from RE %Growth Customs % C. Excise % Service Tax % Total (Net) % Indirect Tax Collections : (Prov.) Source: OECD

Directorate General of Systems & Data Management, CBEC Achievements in Dispute Resolution Financial YearDisposal Supreme Court Disposal High Court Receipts Settlement Commission

1 Rationalizing taxes and procedures to reduce /eliminate litigation assessment disputes and transaction costs 2 Online payments (99% CE, 98% Customs and 90% ST), Return filing, Help desks - Introduction of digital signatures (10% of documents) 3 Risk Management System (covering 98% of import and 95% of export cargo) Introduction of Single Window for Customs Clearance 4 Mechanism for coordinating with stakeholders and other Regulatory Agencies (Customs Clearance Facilitation Committee) – Dwell time reduced by 2 days 24/7 Customs Clearance Operations in major Sea and Air ports (3500 documents daily beyond office hours) Ease of Doing Business

Directorate General of Systems & Data Management, CBEC B. Current Year’s Revenue Challenges

Directorate General of Systems & Data Management, CBEC Present Revenue Trends against Targets Present Revenue Trends against Targets Summary Summary Tax Head Actuals (prov.) B.E Asking rate(%) for For JulyApril to July % Growth Duty without #ARM % Growth without #ARM % Growth Duty without #ARM % Growth without #ARM $Customs *C.Excise Service tax Total

Directorate General of Systems & Data Management, CBEC C. GST Challenges

Directorate General of Systems & Data Management, CBEC CAG report on implementation of State VAT made the following recommendations as lessons for GST implementation:  Resolve major legacy issues before transition  Clear standard operating manuals for returns scrutiny and audit  Integrated computer system with facility for cross verification of input credit  Incentive system involving deferral /exemption of taxes may be phased away as they dilute the advantages of GST Lessons for Implementing GST

Directorate General of Systems & Data Management, CBEC CBEC has taken / proposed to take the following measures:  Creation of a GST Directorate to focus on operational aspect of GST implementation  Creation of GST policy wing in CBEC  Creation of Directorate of Tax Payer Services  Restructuring Directorate of Inspection as Directorate of Programme and Performance Management  Creative use of LTU for registration of services which are pan India in nature i.e., Banking, Insurance and Telecommunication Broadly these measures seek to strengthen the Directorates as an effective intermediate tier between the Board and the field formations CBEC’s Administrative Preparedness for GST

Directorate General of Systems & Data Management, CBEC  Biggest gain from implementation of GST - organized manufacturing :  Level playing between imports and domestic manufacturing  Reduction in non-compliance in the trading segment  creation of a level playing field between domestic manufacture and domestic trading  Requirement for lower inventory levels due to faster movement of goods through removal of bottlenecks in inter-state movement of goods GST & Make in India

Directorate General of Systems & Data Management, CBEC  Expected revenue buoyancy under GST regime:  Due to increase in tax rate - Services  Due to increase in tax base - Goods  shift in the taxable event from manufacture to the ‘supply of goods’  reduction in threshold limit  pruning of exempted list of goods  Due to reduction in non- compliance  Entire value chain to be taxed concurrently by both Centre and State  Reduction in arbitrage between inter-state & intra-state supplies  Systems based ITC matching Revenue prospects under GST

Directorate General of Systems & Data Management, CBEC