The Central Board of Indirect Taxes and Customs (CBIC), which will replace the current CBEC, will become operational from June 1 in preparation for the Goods and Services Tax (GST) regime, an official source said.
The Central Board of Excise and Customs (CBEC) is presently the top policy-making forum for indirect taxes in the country.
"The CBIC will become operational from June 1. There will be no need for different commissionerates for service tax, central excise and others. There will be only one body — Commissionerate for GST," a CBEC source said.
An internal letter from the Directorate General of Human Resource Development said the notification on the CBIC will be issued in the first week of May, ahead of the July 1 rollout date for GST.
The CBIC will have 21 zones, 101 GST taxpayer services commissionerates comprising 15 sub-commissionerates, 768 divisions, 3,969 ranges, 49 audit commissionerates and 50 appeals commissionerates.
"The reorganised formations will become operational from June 1," according to the internal order.
The report on reorganisation of the CBEC field formations to ensure a smooth transition to the GST regime was approved by Finance Minister Arun Jaitley last week.
"The zones, GST taxpayer services commissionerates and sub-commissionerates, audit and appeal commissionerates and the number of divisions and ranges to be formed under each state/union territory, have been approved by the competent authority," the order stated.
"Reorganisation of field formations will be required primarily for three reasons. Firstly, the job profile of current service tax and excise officials will undergo a change. Secondly, new taxpayers, that is, traders will now come under ambit of CBIC. And thirdly, geographical distribution of taxpayers will alter as more taxpayers are likely to be registered in metro cities," GST expert Pritam Mahure said.
The CBEC is taking all requisite steps to ensure that the administrative machinery is geared up to address these challenges in the GST regime, he said.
"For smooth transition to the GST, the government is taking pro-active measures. This order is an evidence that the government is not only ready from information technology perspective but also on the administration front. It appears that the government is diving deep into minute details to ensure that the GST is a success," Jigar Doshi, partner in chartered accountancy firm Sudit K. Parekh & Co, said.
"Given this, it is high time for the industries to look forward to the GST as a reality and take measures to ensure that they are not affected by metamorphic reform of the GST," he said.