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The Finance Ministry through Press Information Bureau recently issued a clarification, putting paid to the rumours and speculations that gained strength after an article in the Business Standard said that the government is mulling over the merger of the Central Board of Direct Taxes and Central Board of Indirect Taxes and Customs. The PIB rubbished the report as “baseless and unverified”.
In a press release, the PIB said that the news regarding the merger of CBDT and CBIC is “factually incorrect” as the government has no proposal to merge the two boards created under the Central Boards of Revenue Act, 1963.
“It has been published without due verification of facts from the competent authorities of Ministry of Finance and only creates a policy distraction when the Ministry is amidst the implementation of a large number of taxpayers’ friendly reforms like the transition from a manual assessment based on territorial jurisdiction to a completely randomized electronic faceless assessment, electronic verification or transactions and faceless appeals,” the statement said.
The PIB said that the merger was one of the suggestions made by the Tax Administrative Reforms Commission (TARC). However, the communique from the government said that after scrutinising in detail the report of TARC, the centre did not accept its recommendations. The same was conveyed in the parliament in 2018 before the Committee on Government Assurances. The statement further added that the website of the Department of Revenue shows that the recommendations proposed by the TARC were not accepted by the government.
Criticising the Business Standard article as “misleading”, the statement said that the piece was published in the newspaper without no due diligence or examination of official records available in the public domain or checking the latest status with relevant competent authorities in the Ministry of Finance.
“It not only reflects poorly on the quality of journalism but also shows a complete disregard for due diligence. If such an unverified story is given a front-page lead story position, it should be a concern for all news-reading public. This news item is completely rejected as baseless and unverified,” read the scathing remarks made by the PIB in its statement busting the misleading report published by Business Standard.
Business Standard article claims merger of CBDT and CBIC was on the anvil
The clarification was issued by the Press Information Bureau after a leading newspaper–Business Standard published an article on 5th July claiming that the central government is contemplating merging CBDT and CBIC. The article titled “Govt’s cost-cutting drive: Proposal to merge CBDT, CBIC back on the table” argued that as a part of the central government’s measures to trim down costs amid increasing revenue losses, the proposal to merge the direct and indirect tax boards, along with a large scale downsizing at all cadre levels is on the cards.
“Reducing entrants to the IRS, both for Customs and I-T, is being considered. Generally, the government informs the Union Public Service Commission every year how many it needs. Sources say this year the recruitment to the IRS has been reduced to half of that of last year. However, the number of IRS vacancies will be known after the results of the civil services examination come out. In 2019, 60 I-T officers had been recruited, against 65 in 2018 and 169 in 2017,” the article read regarding the marked reduction in the hiring for the IRS services.
The Business Standard article attributed the government’s retrenchment drive to the raging coronavirus crisis which has resulted in a cratering economy and widened the fiscal deficit. The move could include freezing of hiring for the Indian Revenue Services(IRS), changes in retirement rules, merging job categories, transferring revenue officers to other departments, and cutting down the allowances of employees, said the article.
“Both the tax boards, in agreement with the finance ministry, are working on cost-cutting measures. Certain proposals have been discussed, such as a unified structure, which would help in creating synergies with a reduced workforce,” the article published in the Business Standard said as quoting a person privy to the development.
It further added that the CBDT had recently issued directives to its departments to drive down key expenditures or imminent expenditures, including those on legal matters, write-off losses, repair and maintenance costs, and rewards to informants, which the article said would not be authorised.