Understanding the Department of Revenue in India
Department of Revenue is the federal agency responsible for handling revenue created from the taxation of citizens and business. This department is also liable for the collection of a wide variety of taxes. Each tax has its own department of revenue that collects local and state taxes in India. The Department of Revenue works under the overall instructions and control of the Secretary (Revenue). Matters related to the Direct and Indirect Union Taxes is monitored by this department via two statutory Boards namely, the Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC).
The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) is headed by a Chairman who is also ex-officio Special Secretary to the Government of India. CBDT is responsible in matters relating to the levy and collection of all Direct Taxes whereas those relating to levy and collection of Customs and Central Excise duties and other Indirect Taxes fall within the duties of the CBIC.
Being a part of the Department of Revenue in the Ministry of Finance, The Central Board of Direct Taxes (CBDT) also supplies some inputs for policy and planning of direct taxes in India and majorly in charge for administration of direct tax laws through the IT Department. The CBDT and CBIC are the statutory authority that constituted functioning under the Central Board of Revenue Act, 1963.
At present, both the CBDT and CBIC have six Members each. These Members also comprise of ex-officio Special Secretaries to the Government of India. Members of CBDT includes a member in Income Tax which is a tax that governments impose on income generated by businesses and individuals within their jurisdiction, a member in Legislation and Computerisation, a member in Revenue, a member in Personnel & Vigilance, member in Investigation and a member in Audit & Judicial. The current secretary of this Department of Revenue in India is Ajay Bhushan Pandey.
Revenues Headquarters
Administration & Management
Administrative work related to the Department is monitored at the Headquarters of the Department of Revenue, coordination between the two boards (CBIC and CBDT), the administration of the Indian Stamp Act 1899 for all matters that fall within the jurisdiction of the Union, the Central Sales Tax Act 1956, the Narcotic Drugs and Psychotropic Substances Act 1985 (NDPSA), the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act 1976 (SAFEM (FOP) A), the Foreign Exchange Management Act 1999 (FEMA), Prevention of Money- Laundering Act, 2002 and the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).
Here are the matters relating to the following attached or subordinate offices of the Department which are Enforcement Directorate, Central Economic Intelligence Bureau (CEIB), Competent Authorities appointed under SAFEM (FOP) A and NDPSA, Chief Controller of Factories, Central Bureau of Narcotics, Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Appellate Tribunal for Forfeited Property (ATFP), Customs and Central Excise Settlement Commission (CCESC), Income Tax Settlement Commission (ITSC), Authority for Advance Rulings (AAR) for Customs and Central Excise, Authority for Advance Rulings (AAR) for Income Tax, National Committee for Promotion of Social and Economic Welfare (NCPSEW), Financial Intelligence Unit, India (FIU-IND), Settlement Commission (Income Tax/Wealth Tax) and Income Tax Ombudsman.
There are numerous Acts that have been administered by the Department of Revenue. The latest Acts that administered by this department are GST Act, 2017, IGST (Extension to Jammu And Kashmir) Act 2017, IGST (Extension to Jammu And Kashmir) Act 2017, Union territory good and service tax act 2017, Fugitive Economic offenders Act 2018 and many others.
The administration of the Acts mentioned at Sl. No.3 (The Indian Institute of Petroleum and Energy Act, 2017), No.5 (Central Educational Institutions (Reservation in Admission) Act, 2006), No.6 (Andhra Pradesh Reorganisation Act, 2014) and No.7 (Street Vendors Act, 2014) is limited to the cases pertaining to the period when these laws were in force. The Department looks after the matters relating to the above-mentioned Acts through the subordinate offices too.
Other than the administration of the Headquarters, the Additional Secretary (R) which is a post and a rank under the Central Staffing Scheme of the Government of India is entrusted with matters related to the Money Laundering Act, the Indian Stamp Act, Central/State Taxes including CST, AED, VAT, Economic Security, Opium Wing and the implementation of Official Language Act and the Rules framed thereunder.
The Department of Revenue mainly has under its supports and the following organizations are Settlement Commission(IT&WT), Customs & Central Excise Settlement Commission, Offices of five Competent Authorities [SAFEM (FOP) Act, 1976 & NDPS Act, 1985], Appellate Tribunal for Forfeited Property, Customs Excise & Service Tax Appellate Tribunal, Enforcement Directorate, Authority on Advance Ruling (IT), Authority on Advance Ruling (Customs & Central Excise) and Finance Intelligence Unit.
Functions and Structures
There are many roles and duties in the Department of Revenue (DOR). DOR is mainly responsible for all matters relating to levy and collection of Direct Taxes and Indirect Taxes. Besides, this department also undergoes investigation into economic offences and enforcement of economic laws. Moreover, DOR also provides prevention and combating abuse of Narcotic drugs and psychotropic substances and illicit traffic therein.
Enforcement of FEMA and recommendation of detention under COFEPOSA or the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act which was passed in 1974 during the administration of Indira Gandhi. The Foreign Exchange Management Act, 1999 (FEMA) unites and modifies the law in relation to foreign exchange with an objective of facilitating external trade as well as payments. This is to promote the development and maintenance of foreign exchange market in India. DOR also governs matters relating to forfeiture of property under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 and Narcotics Drugs and Psychotropic Substances Act, 1985.
Levy of taxes on sales in the course of inter-state trade or commerce and all matters that relate to consolidation or reduction or exemption from payment of Stamp duty under the Indian Stamp Act, 1899. Other than that, DOR also managing the residual work of Gold Control and matters relating to The Customs Excise and Service Tax Appellate Tribunal (CESTAT) which provide as an independent forum to hear the appeals against orders in India. Last but not least, Cadre Control of IRS (Group-A) and IRS (C&CE) (Group-A) which are function under the Department of Revenue of the Ministry of Finance. Further details about the Indian Revenue Service (IRS) will explain below paragraph.
There are a total of 18 divisions or organisations in the Department of Revenue. They are:
- Administration Division
- Sales Tax Division
- Narcotics Control Division
- Committee Of Management
- Revision Application Unit
- Integrated Finance Unit
- Competent Authorities
- Appellate Tribunal For Forfeited Property, Customs, Excise
- Service Tax Appellate Tribunal
- National Committee For Promotion Of Social And Economic Welfare
- Authority For Advance Rulings
- Customs And Central Excise Settlement Commission
- National Committee For Promotion Of Social And Economic Welfare
- Authority For Advance Rulings
- Customs And Central Excise Settlement Commission
- Settlement Commission (It/Wt.)
- Enforcement Directorate, Central Economic Intelligence Bureau
- Enforcement Directorate And Finance Intelligence Unit
All of these organisations work together to ensure all matters relating to the taxation either from citizens or business are going smoothly.
Indian Revenue Service (IRS)
The Indian Revenue Service (IRS) is the administrative revenue civil service under Group A of the Central Civil Services of the executive branch of the Government of India. However, its functions are governed by the Department of Revenue of the Ministry of Finance and are under the administrative direction of the Revenue Secretary and the ministerial command of the Minister of Finance.
The Ministry of Finance plays a crucial role within the Government of India and is concerned with the economy of India and also serves as the Indian Treasury Department. Thus, the IRS is primarily responsible for collecting and management of the various direct and indirect taxes accruing to the Government of India. The IRS consists of 2 branches which are Indian Revenue Service that responsible about Income Tax and Indian Revenue Service (Custom & Indirect Taxes). These two branches are governed by two separate statutory bodies which are the Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC).
The responsibilities of the IRS (IT) are providing tax assistance to taxpayers, pursuing and resolving instances of erroneous or fraudulent tax filings, and formulating and enforcing policy concerning income tax in India. While the formulation and administration of policy concerning the Goods and Services Tax, prevention of smuggling, and administration of matters related to Customs and Narcotics are the functions of the IRS (C&IT).
