Amnesty Scheme – Service Tax Voluntary Compliance Encouragement Rules, 2013 – [Chapter VI of Finance Act, 2013]
Chapter VI of Finance Act, 2013
1. Section 94 Short title
2. Section 95 Definitions
3. Section 96 Person who may make declaration of tax dues
4. Section 97 Procedure for making declaration and payment of tax dues
5. Section 98 Immunity from penalty, interest and other proceeding.
6. Section 99 No refund of amount paid under the Scheme
7. Section 100 Tax dues declared but not paid
8. Section 101 Failure to make true declaration
9. Section 102 Power to remove difficulties
10. Section 103 Power to remove difficulties
11. Section 104 Power to make rules
Section 96 – Persons eligible to avail benefit of scheme?
The following persons can take the benefit of this scheme
The disclosure period in the scheme is from October, 2007 to December, 2012.
Persons not eligible to make declaration
Section 97 – Procedure of availing the scheme
“designated authority” means an officer not below the rank of Asst. CCE as notified by the CCE for the purposes of this Scheme.
On Payment after 30th June, 2014 upto 31st December, 2014
> No waiver of interest;
>However, immunity from penalty & prosecution still be granted up to 31st December, 2014.
Section 98 – Benefit of availing the scheme
The declarant upon payment of amount in default shall get immunity from – interest, penalty, any other proceedings under Service Tax.
• On issuance of acknowledgement of discharge no matter shall be reopened thereafter in any proceedings before any authority or court relating to the period covered by such declaration, subjected to the provisions of Section 101-Failure to make true declaration.
Section 99- No refund of amount paid under the Scheme
• Any amount paid in pursuance of a declaration made under sub-section (1) of section 97 shall not be refundable under any circumstances.
Section 100- Tax dues declared but not paid
• Where the declarant fails to pay the tax dues, either fully or in part, as declared by him, such dues alongwith interest thereon shall be recovered under the provisions of section 87 of the Chapter.
Section 101-Failure to make true declaration.
(1) Where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme was substantially false, he may, for reasons to be recorded in writing, 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.
(2) No action shall be taken under sub-section (1) after the expiry of one year from the date of declaration.
(3) The show cause notice issued under sub-section (1) shall be deemed to have been issued u/s 73, or as the case may be, u/s 73A of the Chapter and the provisions of the Chapter shall accordingly apply.
Power’s with CG (Section 103 & 104)
The department vide circular no. 169/4/2013-ST dated 13.05.2013 has provided certain clarifications in relation to Voluntary Compliance Encouragement Scheme (VCES).
Issue – 1
Whether a person who has not obtained service tax registration so far can make a declaration under VCES?
Any person who has tax dies to declare can make a declaration in terms of the provisions of VCES. If such person does not already have a service tax registration he will be required to take registration before making such declaration.
Issue – 2
Whether a declarant shall get immunity from payment of late fee/penalty for having not taken registration earlier or not filed the return or for delay in filing of return.
Yes. It has been provided in VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made thereunder.
Issue – 3
Whether an assessee to whom show cause notice or order of determination has been issued can file declaration in respect of tax dues which are not covered by such SCN or order of determination?
In terms of section 106 (1) of the Finance Act, 2013 and second proviso thereto, the tax dues in respect of which any show cause notice or order of determination under section 72, section 73 or section 73A has been issued or which pertains to the same issue for the subsequent period are excluded from the ambit of the Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme.
Issue – 4
What is the scope of section 106 (2) (a) (iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106 (2) (a)(iii) for rejection of declaration under the said section.
Section 106 (2) (a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made there under, and such inquiry or investigation is pending as on the 1st day of March, 2013.
The relevant provisions, beside section 14 of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act, 1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows‑
(i) Section 72 of the Act envisages requisition of documents and evidences by the Central Excise Officer if any person liable to pay service tax fails to furnish the return or having made a return fails to assess the tax in accordance with the provision of the Chapter or rules made there under.
(ii) Rule 5A of the Service Tax Rules, 1994 prescribes for requisition of specified documents by an officer authorized by the Commissioner for the purposes specified therein.
The provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorized officer from the declarant under the authority of any of the above stated statutory provisions and the inquiry so initiated against the declarant is pending as on the 1st day of March, 2013.
No other communication from the department would attract the provisions of section 106 (2)(a)(iii) and thus would not lead to rejection of the declaration.
CRUX: If Sec 14 of Central Excise as made applicable to service tax vide section 83 or section 72 of Finance Act or Rule 5A of the Service tax rules gets attracted then the declaration can be rejected u/s 106 (2) (a) (iii).