Service Tax Voluntary Compliance Encouragement Scheme, 2013’ under service tax

By | November 11, 2013

Service Tax Voluntary Compliance Encouragement Scheme, 2013’ under service tax

As per service tax department in our India there are 17 lakh registered assessee under service tax but only 7 lakh assessee are filing their return and paying service tax. Remaining 10 lakh assessee are not filing there return and paying service tax to central government. So to encourage them towards filing of return and enhance the revenue of central government in terms of service tax, central government has launched a scheme which is known as ‘Service Tax Voluntary Compliance Encouragement Scheme, 2013’.

This ‘Service Tax Voluntary Compliance Encouragement Scheme, 2013’ provides the assessee  with a golden opportunity to pay all their ‘tax dues’ from the period 01.10.2007 to 31.12.2012 without interest, penalty and other legal proceedings including prosecution.

VCES had been introduced with effect from May 10, 2013 as a onetime amnesty scheme for paying service tax dues for the period October 1, 2007 to December 31, 2012 without interest and penalty.

 Person who can avail the benefit of this scheme

Any person who has failed to pay, as of 1st March 2013, service tax liability, including Education Cess, relating to the period 1st October 2007 to 31st December 2012 can take advantage of the  Scheme.

Person who can avail the benefit of this scheme

1. Anyone who has been issued before 1st March 2013 a notice or order under section 72, 73, 73A of the Finance Act, 1994 relating to the tax being declared under this Scheme.

2. Anyone who has furnished a service tax return and disclosed the true liability, but has not paid the disclosed amount of service tax or any part thereof for the period covered by this Scheme.

3. If notices or orders of determination have been issued in respect of any period on any service tax issue, the Scheme will not be applicable on such issue for subsequent period.

Procedure for the Availment of the benefit of scheme

Any person who wants to adopt this scheme may make a declaration to the designated authority on or before 31/12/2013 in the prescribed form i.e. ‘VCES 1’ and in prescribed manner.

And it is necessary on the part of declarant to pay at least 50% of tax due to designated authority on or before 31/12/2013 and submit the proof of such payment.

The remaining portion is to be paid on or before June 30, 2014 without interest. However, if balance payment is not made by said date, he has to make remaining payment on or before December 31, 2014, with interest from July 1, 2014 onwards.

The Designated Authority, on receipt of declaration shall issue an acknowledgment thereof in Form VCES-2, within a period of seven working days from the date of receipt of the declaration.

Failure to make true declaration

Where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme was not true, he may. For reasons to be recorded in writing, serve a notice upon such declarant within a period of 1 year from the date of such declaration.

Refund of tax paid is not possible

If assessee paid any amount under this scheme then that amount shall not be refundable in any circumstances.

Recovery of tax

If assessee make any declaration about his tax dues and then fails to make payment of dues to government either in full or part their of then such dues or tax along with interest thereon shall be recovered  by the department.

by C.A. deepika Pamecha

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