1. 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

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

3. Directorate General of Systems & Data Management, CBEC Past Year’s Revenue Performance Tax Head B.E. 2014- 15 R.E. 2014- 15 Actual %RE 2014-15 achieved Shortfall/G ain from RE 2014-15 2013-142014-15%Growth Customs 2018191887131720851878569.2% 99.5 -857 C. Excise 20545218385816848318823811.7% 102.4 4380 Service Tax 2159731681321547781680638.6% 99.96 -69 Total (Net) 6232445407034953465441579.9% 100.6 3454 Indirect Tax Collections : 2014-15 (Prov.) Source: OECD

4. Directorate General of Systems & Data Management, CBEC Achievements in Dispute Resolution Financial YearDisposal Supreme Court Disposal High Court Receipts Settlement Commission 2012-1326035561610 2013-1431934201623 2014-1550449981625

5. 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

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

7. Directorate General of Systems & Data Management, CBEC Present Revenue Trends against Targets Present Revenue Trends against Targets Summary Summary Tax Head Actuals 2014-15 (prov.) B.E 2015-16 Asking rate(%) for 2015-16 For JulyApril to July 2014-152015-16 % Growth Duty 2015-16 without #ARM % Growth without #ARM 2014-152015-16 % Growth Duty 2015-16 without #ARM % Growth without #ARM 1234567891011121314 $Customs18785620833610.9154191899623.21859620.6545946607621.06417617.6 *C.Excise18823822815721.2135122227364.81492310.4475798345475.45405413.6 Service tax16806320977424.8118711547030.31347013.5507236092520.15692512.2 Total54415764626718.8408025673939.14698915.215289621045537.617515514.6

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

9. 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

10. 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

11. 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

12. 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

13. Directorate General of Systems & Data Management, CBEC