Voluntary Compliance Encouragement Scheme, 2013 (VCES) – To motivate about 10 lakh of those registered assesses of service tax, who are not filing returns and paying tax dues, the Finance Minister has proposed to introduce a one-time scheme called ‘Voluntary Compliance Encouragement Scheme’ in 2013-14 Budget proposals. Under this scheme a defaulter can file a truthful declaration of service tax dues since 1st October, 2007 and make the payment in one or two installments before prescribed dates. In such a case, interest, penalty and other consequences will be waived.1 Scheme is proposed to be introduced to encourage voluntary compliance with the following main features:

(i) The scheme can be availed of by non-filers or stop-filers or persons who have not made a truthful declaration in their return. However it will not be applicable to persons against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit;

(ii) The defaulter will be required to make a truthful declaration of all his pending tax dues (from October1, 2007 to December 31, 2012) and pay at least half of that before December 31, 2013; remaining half to be paid by:

(a) June 30, 2014 without interest; or

(b) By December 31, 2014 with interest from July 1, 2014 onwards;

(iii) On compliance with all the requirements the person will have immunity from interest (as specified), penalties and other proceedings;

2 The scheme will come into force when the Finance Bill is enacted. It is clarified that the tax-payers will need to settle their dues for the period after December 31, 2012 under the present law.

Download Service Tax Voluntary Compliance Encouragement Scheme,2013

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0 responses to “Budget 2013-14 – Amnesty Scheme for Service Tax Defaulters”

  1. kumar says:

    We had paid all the dues since 2009 to till date but returns NOT done for any of the financial years till now, will this scheme be applicable ? we have received a notice from Serv.Tax dept – Chennai couple of months back to pay penalty. Can we get the waiver through this scheme ? Pls respond

  2. ankit says:

    can a nil return filer who has not filed previous returns use this scheme??
    liability is zero
    only penalty is der to be paid please reply
    mob 8080737271

  3. Rock says:

    We have finally decided to let go of our zeal to diligently pay taxes now.
    The Service Tax department is harassing Business Persons as if we are thieves.

    We followed all advices from our Knowledgeable Chartered Accountants and now face a daunting task of settling the cases against us by paying a bribe of 2 lacs to the officer and an amount created to deposit tax to the tune of 3 lacs, even after we maintained all our books and bills as per law.

    The rules are so flexible that interpenetration of the inspectors is the only thing that matters and now that they have the powers to arrest you they are even more rabid then before.

    So finally after struggling to be all white for the last 10 years we will now relent and do what the world is doing around us. 10% white and 90% cash.

    Even these inspectors prefer the same things. Or else you leave this country and settle someplace else where they allow you to work and grow. A reall hard fact of the Indian Inspector Raj.

    Thank you

  4. Dhiraj Tiwari says:

    Suppose an Individual who is not filed his return and not paid any dues because of no service provided still can he claim this benefits? and wave the penalty for non filing of return

  5. Uday Botale says:

    The scope of the scheme should be extended for the assessees against whom inquire/appeal is pending.

  6. CS Sharadchandra S Patil says:

    It is not clear whether the penalty for delay in filing returns will be waived. Suppose no tax is to be paid, but the tax returns are not filed. Does the scheme allow to file old NIL returns without any late fees / penalties?

  7. KAILASH KUMAR says:

    If notice has been issued by SIV and i have nor registered with Service Tax since October,2007. Wheather i will come under this provision .

  8. Pradeep Warankar says:

    If dues are paid and no returns has been filed till date,provision is applicable?

  9. Kamal Solanki says:

    Amnesty Scheme will not be applicable to persons against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit.
    Whether persons to whom the department had issued Show Cause Notice for non filing of return before 28.02.2013 can take benefit of this scheme as in the scheme Show Cause Notice are not covered.


    Please explain following,

    1) Suppose a notice is served by the department after this provision i.e. after today. in such case what will happen. Still you get the amnesty or not.
    2) Suppose returns are filed and dues are paid for 2012-13 and 2006-07. But years in between no returns are filed ,dues are unpaid. What will happen.

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