CBDT pursues FM for cadre review, promises additional 25K Crores revenue

Taxmen seek manpower, perks to mobilise Rs 25,000 cr extra revenue

Taxmen will mobilise an additional Rs 25,000 crore revenues each year in case government approves hiring 20,000 personnel afresh and recast existing pay and promotions structure for revenue officials to bring them on par with administrative, forest and foreign services.

The annual additional pay burden on the government due to this restructuring of income tax department would be Rs 400 crore that would be less than 2 percent of extra revenues to be mobilised.

Top taxation officials and chief commissioners of income tax will moot this proposal before finance minister Palaniappan Chidambaram when they meet him on Monday(03/09/2012).
Chidambaram has a scheduled date with tax officials to review the first quarter performance of direct tax collections on September 3. Such review was held by Chidambaram with customs, excise and service tax officials last fortnight.

“With restructuring of tax department, hiring new income tax officers (ITOs) and middle level personnel, we will be able to deliver better. And, we propose to bring this before finance minister” said a revenue department official on condition of anonymity.

Tax officials will press for early consent to a proposal before union cabinet on restructuring of taxation department along with pay, promotions and bringing them on par with their IAS, IPS and IFS counterparts.

Committee of secretaries led by cabinet secretary Ajit Kumar Seth that reviewed the proposal pending before the cabinet is yet to take a call in last three months.

Chidambaram’s predecessor, Pranab Mukherjee had pushed for early cabinet clearance of taxation department restructuring but the ‘powerful IAS lobby’ in the secretaries’ panel effectively thwarted the proposal, revenue officials said.

Revenue service officials alleged that it would take 37 years an IRS officer to attain secretary rank while IAS officers could reach there in 31 years. Interestingly enough, there is no revenue service officer in the rank of secretary out of 4192 officials. There is none even in rank of special secretary from revenue service.

In comparison, there are 246 officers from IAS that enjoy the rank of secretary from a total 4423 officers.

Comparative lower pay scales, grade and structuring of revenue service cadres have also become eye sore for the taxation officials.

Revenue officials will seek intervention of P.Chidambaram to ‘get this anomaly’ corrected along with addition of 20,000 IT officials at lower levels. Out of this, revenue department thinks that just 1000 new revenue service officers would be required.

With this, the taxation officials will be able to scrutinize at least two percent of tax returns as against one percent as on date. “With expanded workforce, this will be possible and additional revenue worth Rs 25,000 crore” said the official.

Revenue department has made out a case for larger workforce pointing to the fact that direct taxes revenue has grown by seven times to Rs 4.46 lakh crore in 2010-11 as against a meager Rs 69,000 crore in 2001-02.

But, in the meantime, the manpower has declined to 57,793 from 60,250 personnel in 2001.

Nevertheless, the taxation department pulled all strings to mop up about Rs 500,000 crore in 2011-12 through direct taxes. For this financial year, the government has set a target of Rs 570,257 crore revenue mop up.

Though the stagnation continues to bog the taxation department, the contribution of direct taxes to the government kitty went up to a staggering 65.98 percent in 2009-10 from 36.31 percent in 2000-01.

Further, the scrutiny workload on the thinly spread taxation officials has moved up to 6.5 lakh in 2010-11 as against 2.17 lakh returns. Further, the income tax department has stretched itself to new areas like services, international taxation, tax deducted at source (TDS), internal audit, transfer pricing, large tax units (LTUs), criminal investigation cases, overseas tax units.

Revenue officials are banking on promised additional revenue of Rs 25,000 crore could clinch the deal for them even if unwillingly by the government and opposition from their IAS counterparts.
Source : An article by Sri K.A. Badrinath, Published in mydigitalfc.com on 5.9.2012