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Picture Courtesy: PIB

Context:

GST & Central Board of Indirect Taxes and Customs Pavilion has bagged the Gold Prize in the ‘Public Outreach and Communication’ Category at India International Trade Fair (IITF) 2025 in New Delhi.

About CBIC:

The Central Board of Indirect Taxes and Customs (CBIC) is the principal authority responsible for administering India’s indirect tax system, including customs duties, central excise, and Goods and Services Tax (GST). It functions under the Department of Revenue, Ministry of Finance, and plays a central role in tax policy formulation, law enforcement, and trade facilitation.

Established Under: Central Board of Revenue Act, 1963. CBIC serves as the administrative backbone for customs and indirect taxes, ensuring efficient revenue collection and smooth implementation of tax laws across the country.

Key Functions of CBIC:

CBIC’s responsibilities span taxation, enforcement, trade facilitation, and policy implementation. Its major functions include:

Revenue Administration: Ensures efficient collection of customs duties, excise duty (where applicable), and GST—essential components of the government’s tax revenue.

Trade Facilitation: Simplifies customs procedures, promotes paperless processing, and adopts digital technologies to make cross-border trade faster and more transparent.

Policy Execution: Implements customs, excise, and GST policies in alignment with government objectives, balancing revenue needs with business and trade requirements.

Ensuring Compliance: Promotes voluntary compliance through awareness, guidance, and enforcement actions against tax evasion, smuggling, and fraud.

Technology and Modernisation: Introduces IT-driven systems such as ICEGATE, GSTN, and risk-management tools to improve efficiency and enhance transparency in tax administration.

International Cooperation: Collaborates with global customs and tax agencies to strengthen trade practices, combat smuggling, and exchange best practices.

Accountability and Transparency: Aims to maintain integrity in tax administration through clear processes, grievance redressal, and strong vigilance mechanisms. 

Objective of CBIC:

• Ensures efficient revenue mobilisation
• Facilitates legitimate trade
• Supports economic growth
• Encourages voluntary compliance
• Upholds integrity, transparency, and fairness in tax enforcement 

Composition of CBIC:

CBIC is headed by a chairperson, the senior-most officer of the Indian Revenue Service (IRS – Customs & Indirect Taxes), who also serves as ex officio Special Secretary to the Government of India.

The Board includes members in charge of:

• Customs
• GST and Tax Policy
• Central Excise, Service Tax & Legal matters
• IT & Taxpayer Services
• Administration & Vigilance
• Investigation

Regulatory Functions of CBIC:

• Customs Regulation: Formulates and enforces rules governing the import and export of goods, preventing smuggling, revenue leakage, and illicit trade.
• GST Oversight: Issues guidelines, clarifications, and notifications to ensure smooth implementation of GST and promote timely filing and tax payment.
• Tariff Classification: Classifies goods under the Harmonized System of Nomenclature (HSN) and GST rate schedules to determine appropriate duties and taxes.
• Trade Facilitation: Implements systems like electronic data interchange, faceless assessment, and risk-based inspections to speed up cargo clearance.
• Risk Management: Uses risk-based tools to identify suspicious consignments and optimise inspections, balancing trade facilitation with security.
• Anti-Evasion Measures: Conducts audits, investigations, and intelligence operations through agencies like DRI and DGGI to curb tax evasion.
• Valuation of Goods: Ensures accurate valuation of imported and exported goods to prevent under-invoicing or overvaluation.
• Intellectual Property Rights Enforcement: Works with rights-holders to block counterfeit or pirated goods at borders.
• Implementing Trade Policies: Administers schemes such as duty drawback, export incentives, and preferential tariffs under trade agreements.
• Legal and Regulatory Framework: Issues circulars, notifications, and amendments to keep customs and GST laws aligned with evolving trade and policy needs.
• Stakeholder Engagement: Consults industry associations, exporters, importers, and taxpayers to address operational challenges and improve compliance.

Attached offices:

• Customs Commissionerates
• GST Commissionerates
• Central Excise Commissionerates
• Central Tax Commissionerates
• Customs Preventive Units
• Central Revenues Control Laboratory (CRCL)
• Customs Houses & Facilitation Centres
• Appellate Authorities

What are the key concerns of CBIC?

• High Compliance Burden and Complexity of the Goods and Services Tax System: The Goods and Services Tax system continues to be complex due to multiple tax slabs, frequent changes in notifications, and technical inconsistencies. The Parliamentary Standing Committee on Finance (2023) noted that small and medium enterprises still face difficulties in filing returns and handling digital processes. 

• Technology Glitches and System Overload in Digital Tax Platforms: Digital platforms such as the Indian Customs Electronic Gateway, the Goods and Services Tax Network and the Automation of Central Excise and Service Tax system often face outages or integration issues.
  The Comptroller and Auditor General of India Report (2022) pointed out mismatches between the systems of the Goods and Services Tax Network and the Central Board of Indirect Taxes and Customs. 

• Rising Tax Evasion and Ineffective Enforcement Against Fake Invoicing: Despite enforcement efforts, fraudulent tax practices continue to rise. The intelligence wing of the Central Board of Indirect Taxes and Customs reported fraudulent input tax credit claims worth more than fifty-five thousand crore rupees in 2023. 

• Human Resource Shortages and Capacity Constraints: The Central Board of Indirect Taxes and Customs manages one of the world’s largest indirect tax systems, but staffing and training gaps remain. The Seventh Central Pay Commission highlighted shortages in customs field formations, especially at ports with heavy cargo traffic. 

• Rising Incidents of Smuggling and Illegal Cross-Border Trade: Smuggling of gold, narcotics, electronics and wildlife products remains a significant concern. The Annual Report of the Directorate of Revenue Intelligence (2023) recorded a thirty-five percent increase in gold smuggling at airports. 

Conclusion:

The Central Board of Indirect Taxes and Customs stands at the heart of India’s indirect tax administration, balancing revenue mobilisation, trade facilitation and enforcement responsibilities. While it has modernised significantly through technology-driven systems and nationwide integration of customs and goods and services tax processes, it continues to face persistent challenges such as rising tax evasion, digital bottlenecks, human resource constraints and increasing litigation. Strengthening institutional capacity, enhancing transparency and improving coordination with state governments remain essential for building a more efficient, responsive and predictable indirect tax ecosystem. 

Source: PIB