Service Tax Voluntary Compliance Encouragement Rules, 2013 –“AMNESTY SCHEME”

By Accommodation Times News Service

By Niraj Punmiya

What is the scheme all about??
The ‘Voluntary Compliance Encouragement Scheme’, which came into force after passage of Finance Bill on May 10, can be availed by a service tax defaulter by this year end.
VCES grants immunity from interest, penalty and other proceedings under the Finance Act, 1994 provided a truthful declaration of the service tax dues are made and tax along with interest (if any) is paid in installments within the time-limits specified.
Eligibility for the scheme:
1. Tax payers/ assessees who have not filled return or stopped filling returns or who have not made a truthful declaration in their return for the period October 1, 2007 to December 31, 2012 are eligible to apply under VCES.
2. The scheme aims to provide one-time amnesty to such assessees.
Any service tax which becomes due or payable for the month of  January, 2013 and subsequent months shall be payable by an assessee with interest.
Benefits under the scheme are available to a:
• person to whom no notice or order of determination of tax dues has been raised or issued before March 1,2013.
• person who has not disclosed his true service tax liability,
• person against whom, no inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid or no audit has been initiated, and such inquiry, investigation or audit is not pending as on March 1, 2013.
Subject to the limitations mentioned, all persons are entitled to participate in the scheme. For instance, unregistered assessees who have tax dues are required to register under the service tax laws before making declaration under VCES.
It is pertinent to note here that though, as per the extant provisions of the service tax laws, non-registration would typically attract penalty, a  declared who registers himself to benefit under VCES would however be granted immunity from penalty under the service tax laws.
Also, service tax assessees who have collected service tax but not deposited the same with the Government can opt to avail the benefit of VCES.
Tax dues under the VCES need to be paid in cash since as per the said rules, no CENVAT Credit can be utilized for such payment.
Procedure under the scheme:
1. Registration: Any person, who wishes to make a declaration under the Scheme, shall, if not already registered, take registration under rule 4 of the Service Tax Rules, 1994.
2. Form of declaration: The declaration under sub-section (1) of section 107 of the Act, in respect of tax dues under the Scheme shall be made in Form VCES -1.
3. Form of acknowledgment of declaration: The designated authority on receipt of declaration shall issue an acknowledgement thereof, in Form VCES -2, within a period of seven working days from the date of receipt of the declaration.
4. Payment of tax dues:
(1) The tax dues payable under the Scheme along with interest, if any, under
section 107 of the Act shall be paid to the credit of the Central Government
in the manner prescribed for the payment of service tax under the Service Tax Rules, 1994. (2) The CENVAT credit shall not be utilised for payment of tax dues under the Scheme.
5. Form of acknowledgement of discharge:
(1) The designated authority shall issue an acknowledgement of discharge under subsection (7) of section 107 of the, Act, in Form VCES-3.
(2) The acknowledgement of discharge shall be issued within a period of seven
working days from the date of furnishing of details of payment of tax dues in full along with interest, if any, by the declarant.

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