Service Tax Voluntary Compliance Encouragement Scheme (ST-VCES): An Opportunity Not to Miss!

The scheme will be operational from the date on which the Finance Bill, 2013 receives the assent of the President.

‘Tax dues’ means, service tax due or payable for the period beginning from the 1st day of October, 2007 and ending on the 31st day of December, 2012 including a cess leviable thereon but not paid as on the 1st day of March, 2013.

Eligibility for this scheme (VCES, 2013)

1. Any person may declare his tax dues in respect of which NO notice or an order of determination under Finance Act has been issued or made before the 1^st day of March, 2013.

2. The person who has furnished service tax return and disclosed his true liability, but has NOT paid the disclosed amount of service tax or any part thereof, shall NOT be eligible to make declaration for the period covered by the said return.

3. Provided further that where a notice or an order of determination has been issued to a person in respect of any period on any issue, NO declaration shall be made of his tax dues on the same issue for any subsequent period.

The scheme will not be applicable to a person against whom any inquiry, investigation (in respect of not levied or not paid or short levied or short paid) by the issue of search warrant or summon or by way of audit is pending as on the 1st day of March, 2013.

Procedure for Making Declaration and Payment of Tax Dues

1. A person may make a declaration to the designated authority on or before the 31st day of December, 2013 in a prescribed form. The designated authority shall acknowledge the declaration.

2. The declarant shall, pay minimum fifty per cent of the tax dues so declared on or before the 31st day of December, 2013.

3. The remaining fifty percent to be paid by:

(a) 30th June, 2014 without interest; or   

(b) by 31^st December, 2014 with interest, from 1^st July, 2014 onwards.

Immunity from Interest, Penalties and other Proceedings

1. The declarant, upon payment of the tax dues declared by him and other compliance under this scheme shall get immunity from penalty, interest or any other Proceedings.

2. A declaration made under this scheme shall become conclusive upon issuance of acknowledgement  and no matter shall be reopened thereafter in any proceedings under the Chapter before any authority or court relating to the period covered by such declaration, EXCEPT; where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme was substantially false.

For that reason Commissioner of Central Excise may, serve notice on the declarant in respect of such declaration requiring him to show cause why he should not pay the tax dues not paid or short-paid.

Important points to be noted

1. Any amount paid in pursuance of a declaration made under this scheme shall not be refundable under any circumstances.

2. Where the declarant fails to pay the tax dues, either fully or in part, as declared by him, such dues along with interest thereon shall be recovered under the provisions of section 87 of the Finance Act, 1994.

3. The scheme will be operational from the date on which the Finance Bill, 2013 receives the assent of the President

Views are personal. The information is for general awareness and may not be relied upon for any legal purpose. Author shall not be responsible for any loss or damage, if any, in any manner whatsoever.

Rabish Chandra

Contact @rabishchandra on twitter