Bad blood is brewing between the direct and indirect tax arms of the Union Government.
Anomalies created by unprecedented promotions in the Indian Revenue Service (Income Tax) June have cheesed off the folks in IRS (Customs and Central Excise).The “seige within” FinMin’s two revenue generators originated when IRS (Income Tax) wangled an unprecedented increase in career opportunities** six weeks back.
There’s no sign yet of a corresponding expansion in IRS (Customs and Central Excise).Assuaging the 2,500-strong customs and central excise leadership is key to Finance Minister P Chidamabaram delivering Rs 5.65 lakh crore of indirect taxes (customs, central excise and service tax) to the kitty this fiscal.That, and the voluntary (service tax) compliance ecouragement scheme announced in this Budget, dominate the agenda for the annual conference of Central Board of Excise and Customs (CBEC) brass with the FM Wednesday.
North Block grapevine has it that the CBEC expansion plan, pegged on a pro rata expansion in their top posts, has landed with the committee of secretaries (CoS), the decision-making body of civil servants chaired by Cabinet Secretary Ajit Seth.An empowered group of ministers (eGOM) had dealt with the IRS (Income Tax) file.
Since CoS has Indian Administrative Service (IAS) officers, apprehension has gained ground that the number of apex-level positions and those in the higher administrative grade-plus (HAG+), and HAG for customs and central excise cadres will be significantly lesser.While they are two separate services, both arms of the IRS report to the finance ministry, and havea history of parity in career development.
IRS (Income Tax) has a larger number of officers, so a pro rata equation drives the number of top positions available to the two services at positions below their respective boards, Central Board of Direct Taxes (CBDT) and CBEC.As reported in these columns on June 5, Chidambaram on June 1 single-handedly piloted the creation of26 new positions called Principal Chief Commissioners of Income Tax (PCCIT) in the “apex scale.”
This followed a general approval to Chidambaram’s plan by the Union Cabinet on May 23.The “apex scale” meant that 26 more IRS (Income Tax) Officers got into the coveted grade of Rs 80,000; so far reserved for full secretaries of the government of India, special secretaries to GOI, army commanders, and heads of police and forest forces in the country, besides Members and Chairman of the Central Board of Direct Taxes (CBDT).
The lock-stock-and-barrel upgrade of IRS (Income Tax) officers to the “apex scale” was unprecedented in the history of tax administration.Concurrently, Chidambaram had 91 Chief Commissioners of Income Tax (CCIT) upgraded to a higher grade called ‘HAG+’from their existing pay scale of additional secretary (called HAG or “higher administrative grade,” drawing Rs 67,000-79,000)
With HAG+, ie, Rs 75,500-80,000, the new plumes of these 91 CCITs, are almost the same as those in the “apex scale” of Rs 80,000.With 26 new positions in “apex scale,” adding six CBDT Members and the Chairman,and 91 in HAG+, the IRS (Income Tax) has, with one executive fiat, 124 officers at the top of the government’s hierarchical pyramid; a mass of specialists who must soon enough question the dominance of the IAS in revenue matters, ie, why the Chairman CBDT, as well as the chief of CBEC, must report to the Revenue Secretary, when he too is in the “apex scale”!
With Rs 5.65 lakh crore going for them, the CBEC folks don’t want to be left behind.For context, only Chairmen of CBEC and CBDT were in the “apex scale” (pre-revised Rs 26,000 and now Rs 80,000) until the Six Central Pay Commission (SCPC) report came in.In the name of expanding career opportunities for non-IAS services, the SCPC upgraded CBDT and CBEC Members to the “apex scale,” though only the Chairman came to be designated as an “ex-officio Special Secretary to the Government of India,”and continued to report to the Revenue Secretary.
The core concept of ‘apex scale’ is that a Secretary, almost always from the IAS, or its pre-Independence predecessor, the Indian Civil Service, will be the numerouno of the ministry/department and the single-point advisor of the Government of India. FinMin, due to its size, has a separate Secretary for revenue, economic affairs, expenditure, and financial services, all in the “apex scale” dealing with the FM directly, the senior-most among them called the Finance Secretary. The Chief Economic Adviser, residing in the ministry, is an ex-officio Secretary too.
With the June 1 order, the word “apex’” began to connote a different meaning within the FinMin dictionary!
(http://www.dailypioneer.com/columnists/business/chidambaram-pilots-biggest-ever-heist-of-apex-scale-by-irs.html)(The columnist is CEO & Co-Founder, India Strategy Group, Hammurabi & Solomon Consulting. Tweets: @therohitbansal).