Mriganki Jain
Chapter VI, Service tax
Service Tax has become the king in the sphere of the taxation in the mere future. Daily amendments and notifications at the same time, has regarded it as most complicated law and generated huge litigation. Due to its complexity there has been lack of clarity about the applicability of the service tax and the tax payers find themselves incompetent to decide whether they fall under the ambit of service tax and hence most of them did not deposit the tax on a bona fide belief that they are not liable for any service tax due to exemptions or otherwise as the case may be. Thus the Government with time had come out with the new scheme known as VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, under section 94, through the enactment of the Finance Bill, 2013 i.e. May 10, 2013.
The Hon’ble Finance Minister of India Mr. P. Chidambaram in his budget speech mentioned that there are nearly 17, 00,000 registered assesses under the service tax but only about 7, 00,000 assesses file their service tax returns. In such state amnesty scheme is an open gate to all the tax payers / assesses who have failed to pay as on 1st March 2013, service tax liability, education cess, relating to the period 1st October 2007 to 31st December 2012, or had not filed return or stopped filling return or have not made a truthful declaration in their return for the same period of time.
ELIGIBILITY as per chapter VI sec 96, of service tax:
- Any person can declare his tax dues, in respect of which NO notice or an order of determination under sec 72 or sec 73 or sec 73A of The Finance Act has been issued or made before the 1st day of March, 2013.
- Provided that the person who has furnished return u/s 70 of the chapter 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:
- 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 event.
- Where a declaration has been made by a person against whom,-
1. An enquiry or investigation in respect of a service tax not levied or not paid or short- levied or short-paid.
- Search of premises under section 82, of the chapter; or
- Issuance of summons under section 14 of the Central Excise Act, 1944, as made applicable to the chapter under section 83 thereof; or
- Requiring production of accounts, documents or other evidence under the chapter
2. An audit has been initiated.
And such enquiry , investigation or audit is pending as on the 1st day of March 2013, then the designated authority shall by an order, and for reasons to be recorded in writing, reject such declaration.
DECLARATION & PAYMENT of tax dues:
A person may make a declaration to the designated authority on or before the 31st day of December, 2013 in the form VCES-1.
The declarant shall, on or before the 31st day of December, 2013, pay not less than 50% of the tax dues so declared and submit proof of such payment to the designated authority.
The tax dues or part thereof remaining to be paid after the payment made shall be paid by the declarant on or before the 30th day of June, 2014.
Provided that where the declarant fails to pay said taxes on or before the due date, he shall pay the same on or before the 31st day of December, 2014 along with the interest thereon, for the period of delay starting from the 1st day of July, 014
Provided further that any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months shall be paid by him along with interest for delay in payment thereof.
The declarant shall furnish the details of payment along with a copy of acknowledgement In Form VCES-2, to the designated authority.
DISCHARGE (Compliance) Certificate
On application to the designated authority, enclosing evidences of complete payment of tax dues, including interest (if any) for delayed payment under this scheme, the designated officer will issue an “ACKNOWLEDGEMENT OF DISCHARGE” in Form VCES-3, as compliance.
IMMUNITY
On obtaining the acknowledgement of discharge, for the default disclosed, immunity is granted from:
- PENALTY
- INTEREST
- ANY OTHER PROCEEDING
IMPORTANT POINTS TO BE NOTED:
1. Tax paid under VCES is not refundable
2. As per Rule 6(2) of the VCES Rules, Cenvat Credit shall not be utilized for payment of tax dues under the scheme.
3. If the declaration made under VCES is found substantially incorrect by the Commissioner of central Excise, then show cause notice is to be served for recovery of tax dues paid or short paid within a period of one year from the date of declaration.
In the overall view the scheme is little confusing whether it is to benefit the defaulters or is like Bait to them. In total most of the defaulters haven’t disclosed their true Faces till date.
Disclaimer
Information given here is collected or created to the best of my knowledge and ability about the subject. It is not meant to be treated as professional guidance for your specific case or situation.
Mriganki Jain – Mriganki.jain@gmail.com
