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Vces

Sanjeev Singla (Chartered Accountant) (59 Points)

03 April 2014

Hii,

My client has opted the VCES Scheme. and as per scheme he has paid 50% service tax before 31st Dec 2013 and rest will be paid on or before 30th June 2014. Now my question is oct 2012 to dec 2012 is covered under VCES but Jan 2013 to March 2013 is not covered under VCES. so whether penalty will be leived when he file the return from oct 2012 to March 2013 ( bcz he will paid 50% tax on or before june 2014 and till that he can not file the return.)

if any other option is available then plz guide me how to solve or how to waive penalty of non vces period (jan 2013 to march 2013) ???

thanx

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Rashmi (CA Final Student) (137 Points)
Replied 04 April 2014

Sir,

You may file return for the oct12 to mar13 period as follows:

a) show the service tax amount pertaining to oct-dec'12 in arrears section of return, no interest or penalty shall be payable thereon. Disclose only that much amount that has been paid under VCES, i.e. in your case, show only 50% of the tax dues, the balance 50% can be shown in subsequent return when its payment has been made

b) show the service tax amount pertaining to Jan-mar'13 in arrears section. However, you cannot evade the interest penalty payable thereon..

The VCES scheme is applicable only for the period Oct 2007 to Dec 2012, from 01.01.2013, regular provisions of the Act shall be applicable and no amnesty under this scheme would be provided.

If any demand is raised upon you for not paying interest on ST for Oct-Dec'12, you may furnish acknowledegment form of payment under VCES as a clarification in this regard. But for post VCES period, I do not see any relief..