About vces 2013

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2013 Dear Sir,

My Registration for service Tax as per rule had became pending from 2003 only, but as per service tax Rules Show cause notice may be issued for period of last 5 years only.

Now my question: If I apply for registration under VCES 2013 from 1/10/2007 and pay all taxes due from 1/10/2007 till date then shall i be liable to:

a) Pay penalty for late registration applicable from 2003 ?
b) Pay interest, penalty & Tax on the amount i Had received from 2003 against taxable services?

Finally Is it safe for me to take benefit under for VCES Scheame.

RENGARAJ R.K

RENGARAJ R.K (Expert)
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25 August 2013 You have not indicated whether you are having any tax liability during the VCES period 1.10.07 to 31.12.12?

If so, you can avail this scheme and avoid penalty, interest for late filing of returns. You can take RC now. You need not worry if you have not received any SCN as on 01.03.2013.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 August 2013 Please note,
As far as turnover was concerned to avail small service provider benefit my limit was crossed in year 2003 only, so every transaction thereafter was taxable & thus my tax liability is from then only, but if we start considering from AY: 2007-2008
My turn over for taxable services are as follows:

FY: 2007-2008=590090.00 (limit:800000.00)
FY: 2008-2009=1124804.00(limit:1000000.00)
FY: 2009-2010=2912874.00(limit:1000000.00)
FY: 2010-2011=287134.00 (limit:1000000.00)
FY: 2011-2012=3973884.00(limit:1000000.00)
FY: 2012-2013=3771723.00(limit:1000000.00)

Now if i consider only period from FY: 2007-2008 then my Tax liability starts from FY:2008-2009 only & thus in year 2008-2009 my tax liability is on amount 1124804-1000000.00 = 124804.00 & from there-onwards from Rs.0.00

Ques. 1: Is there anything wrong in this calculation i.e. everything OK as required to apply as per VCES?

Ques.2: Can officer ask me to show my old records before FY:2007-2008 when i apply him for VCES (where i am faulty but rule says they cannot enter in this period which is older then 5 years to issue SCN)

Ques. 3: Can on the basis of my records older then 2007-2008 they may charge tax right from 2007-2008 also?

Pointwise answers shall be highly praised and helpful to give clear understanding.

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RENGARAJ R.K

RENGARAJ R.K (Expert)
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26 August 2013 Once you opt for vces there will be no scrutiny of records, but from 1.1.2013 you should start paying the taxes and file the return correctly. If that is not done, interest and penalty will apply and not for earlier periods.

ans: 1) the working is correct
2) no
3) no
you have to pay the amount in two instalments and get immunity of penal provisions.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 August 2013 Thanks a lot for your guidance

While applying under VCES, can we make the registration online also or we have to apply by manually going to office & register the same?

Further can the application under VCES1 may also be done online or same has to be applied by manually going to the service tax office.

please explain the procedure

RENGARAJ R.K

RENGARAJ R.K (Expert)
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29 August 2013
Procedure for availing the VCES scheme
Step 1
If the declarant is not registered, then he is first required to get himself registered and then apply for this scheme. For details, please visit www.aces.gov.in .
Step 2
After registration, the declarant shall make a declaration in Form VCES-1 to the designated authority on or before 31.12.2013.
Step 3
On receipt of Form VCES- 1, the designated authority will issue acknowledgement of declaration in Form VCES-2 within 7 working days from the date of receipt of declaration.
Step 4
The declarant is required to pay not less than 50% of tax dues on or before 31st December 2013. Balance on or before 30th June 2014 and if not paid, can be paid on or before 31st December, 2014 alongwith interest from 1st July 2014.
Cenvat credit cannot be utilized for payment of dues (Rule 6(2)).
Amount paid shall not be refundable.
Step 5
On full payment of taxes, the designated authority will issue acknowledgement of discharge in VCES-3 within 7 working days from the date of furnishing of details of tax dues paid in full, along with interest if any. Last date for payment of first installment of 50% of total tax dues is 31.12.2013 and balance amount on or before 30.06.2014 or 31.12.2014 (with interest).
Persons not eligible for the scheme
I. Person cannot make declaration of tax dues for which
a) SCN (u/s 73 or 73A)
b) Order (u/s 72, 73, 73A) issued or made before 01-03-2013. [section106(1)]
II. A person who has filed return, declared his true tax liability but not paid [106(1) proviso]
If a SCN or order has been issued on any issue (say taxability or valuation), declaration cannot be filed on same issue for subsequent period [106 (1) proviso]
III. Where any inquiry or investigation has been initiated and is pending as on 01.03.2013 by way of
a) Search u/s 82 of FA 1994
b) Issue of summons u/s 14 of CEA 1944
c) Issue of notice requiring production of accounts or documents [Section 106(2)]

IV. Where audit has been initiated.

However, letters requiring production of documents, not mentioning sections 14 (CEA), 72(FA) and rule 5A(STR), would not be treated as covered under section 106(2).
[TRU Circular dated 13.05.2013]

NO ONLINE FORMS. IT HAS TO BE SUBMITTED MANUALLY.