CIRCULAR No.05/13

Transcription

1 SATISH AGGARWAL & ASSOCIATES Chartered Accountants 4/5B Asaf Ali Road New Delhi , India Telefax: , , CIRCULAR No.05/ Voluntary Compliance Encouragement Scheme, 2013 (Amnesty Scheme of Service Tax) What is the Amnesty Scheme about? Service tax Amnesty Scheme (known as Service Tax Voluntary Compliance Encouragement Scheme, 2013 ) [VCES for short] has been introduced in Finance Act, The scheme is effective from 10th May Applicability:- The scheme can be availed by non-filers or stop-filers or persons who have not made a truthful declaration of their service tax receipt in their returns. However, it will not be applicable to persons against whom any inquiry or investigation of service tax is pending by issue of search warrant or by way of audit. How To Apply:- 1. Such person should file a declaration in prescribed form VCES-1 with the designated Assistant/Deputy Commissioner of his tax dues. 2. The designated officer shall issue acknowledgment of declaration within seven working days in form VCES Atleast 50% of tax admitted (for the period to ) should be paid before and balance 50% before Service tax can be paid even by , but in that case, interest will be payable. Interest rate shall be payable at 1

2 the rate of 18%. In case value of taxable services is less than Rs.60 lakhs from , interest will be payable at the rate of 15%. Once such declaration is made and tax dues are paid, no interest or penalty will be payable under any of the provisions under Finance Act, 1994 relating to service tax. Who can take benefit of the Amnesty Scheme? 1. Persons who has taken service tax registration number not because he has any service tax liability but because of some other reasons (e.g. (a) In many Government tenders, service tax registration number is required. (b) Many big companies have Vendor Registration procedure, and these big companies insist on the service provider to have service tax registration number (howsoever small and illiterate he may be). (c) Some obtain registration number due to ignorance of law or wrong advice) but later did not file any service tax return as they have no service tax liability. 2. Service provider who in fact filed return electronically, but the return was either not accepted by the system or was not traceable on the system. 3. Service provider who is registered but did not pay service tax and/or file returns can take advantage of this scheme. 4. Service provider who is not registered under service tax and did not pay service tax can also take benefit of this scheme The scheme is open only to those service providers to whom any show cause notice or notice of audit or summons have not been issued prior to

3 5. Those who had not paid any service tax and did not file returns as there was no liability (though they are registered under service tax), can also file a declaration and seek immunity from penalty from late filing or non-filing of service tax returns. What details are to be submitted with the declaration? Along with the declaration in form VCES-1, a calculation sheet of tax dues is to be attached. The calculations should be in form as per Sr No. 3F(I) of old ST-3 for the period to and in form as per Part B of new ST-3 for the period to The details are to be submitted service wise. Utilization of Cenvat credit for the past period? Rule 6(2) of Service Tax Voluntary Compliance Encouragement Rules, 2013 states that Cenvat credit shall not be utilized for payment of tax dues under this Scheme. What is the effect of submitting declaration and paying taxes due? On payment of tax dues and interest (applicable only if service tax is paid after ) and after submitting necessary declarations, the declarant shall get immunity from penalty, interest or any other proceeding under the Finance Act, 1994 section 108(1) of Finance Act, Thus, any penalty or late fee for non-filing or late filing of return or penalty for not getting registration will also not be payable [confirmed in para 2 of CBE&C Circular No. 169/4/2013- ST dated ] Such immunity is not subject to getting discharge certificate from AC/DC. Thus, such immunity should be available even if certificate of discharge is not issued by AC/DC. The, Service provider is not required to not follow up to get such certificate as it may cost much more. No other benefit or immunity There would be no other benefit, concession or immunity (except as specified in section 108(1) of Finance Act, 2013 section 112 of Finance Act, 2013 to the declarant under the immunity scheme. 3

4 What the section implies is that the service provider cannot claim benefit, concession or immunity from other legal provisions like Income Tax, Sales Tax, Excise Act or under any Criminal Law. Can the matter be reopened? The declaration shall become conclusive upon issuance of acknowledgement of discharge by AC/DC under section 107(7). No matter shall be reopened thereafter in any proceedings under The Finance Act, 1994 before any authority or court relating to the period covered by such declaration section 98(2) of Finance Act, In case of any further information you may contact Mr. Dharender Kumar at our office landline numbers. Thanking you, With regards, (Satish Aggarwal) 4

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