Service Tax Voluntary Compliance Encouragement Scheme, 2013

Introduction

Finance Act 2013 has announced Service Tax Voluntary Compliance Encouragement Scheme, 2013 provides you with a golden opportunity to pay the ‘tax dues’ from the period 01.10.2007 to 31.12.2012 without interest, penalty and other legal proceedings including prosecution.

Eligibility

A person who was required to pay Service Tax under the Service Tax provisions for the period 1st October 2007 to 31st December, 2012, which remains outstanding as on 1st March, 2013 is eligible to get benefit of the scheme provided the same was not detected by Service Tax Department as on 1st March, 2013.

Non Eligibility

  • Any assessee who has already furnished service tax return and disclosed the amount of service tax payable, but has not paid the fully or any part thereof for the period covered by this scheme.
  • Person against whom order or notice under section 72/73/73A has been issued before 01-03-2013 or person against whom an inquiry or investigation has been initiated and such inquiry or investigation is pending on 01-03-2013.

Benefits

No Interest.

No Penalty.

No Legal Proceedings.

 

Procedure

  • Declaration in form VCES-1 where total amount of Service Tax, Education Cess and SHE Tax is payable is to be stated must be filed with the designated Authority on or before 31st December, 2013 along with Service and period wise calcolation sheets of Tax dues.
  1. If the declaration is accepted:

    Within 7 days of filing of declaration VCES 1, the dept will issue acknowledgement for the declaration in VCES 2.

  2. If the declaration is Rejected:

    showcause notice for rejection of declaration will be issued within 30 days of filing of declaration with the dept. In this case the regolar provisions for the recovery of taxes will apply.

  3. Reasons for Rejection of declaration:

    where an enquiry, Investigation or audit under the act is pending against the assessee as on the 1st day of March, 2013.

  • Payment of Tax Dues Declared.
  1. 50% of the amount of tax dues declared to be paid on or before 31-12-2013.
  2. Remaining 50% of the tax dues declared to be paid on or before 30-06-2014.
  3. If the declared tax is not paid before due dates mentioned above the same can be paid with interest up to 31-12-2014.
  4. If total amount declared under the scheme is not paid, the person will not get benefit of the scheme.
  • Intimation of payment of due tax has to be submitted to the designated authority along with proof of payment and copy of the Form VCES 2.
  • Acknowledgment of discharge of liability in VCES 3 will be issued within 7 days of submission of details of “total dues” paid under the scheme.
  • Further no action can be taken against the assessee “for the matter” under Service Tax Provisions.

Other important points

  1. The CENVAT credit shall not be utilised for payment of tax dues under the Scheme.
  2. Calculation Sheets in respect of tax dues are prepared in the format at 3 F (I) or as the case may be the Part B of the Form ST 3, as existed during the relevant period.
  3. The period covered under this scheme from 01-10-2007 to 31-12-2012; hence the declaration can be filed from 1st October, 2007 to 31st December, 2012.

To view Frequently Asked Questions on VCES, 2013.

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