Service Tax Voluntary Compliance
Encouragement Scheme Clarifications
[Service Tax Circular No. 169 dated 13th
May 2013]
Sub: The Service Tax Voluntary Compliance
Encouragement Scheme-clarifications.
The
Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into
effect upon enactment of the Finance Bill 2013 on the 10th May, 2013. The
Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to
bring into effect the Scheme. Some references have been received seeking
clarification as regards the scope and applicability of the Scheme.
2. The issues have been examined and
clarifications thereto are as follows:
|
S.
No. |
Issues
|
Clarification
|
|
1 |
Whether
a person who has not obtained service tax registration so far can make a
declaration under VCES? |
Any
person who has tax dues 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. |
|
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. |
|
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. |
|
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 thereunder, 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 thereunder. (ii)
Rule 5A of the Service Tax Rules, 1994 prescribes for requisition of
specified documents by an officer authorised 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
authorised 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. |
[F. No.
B1/19/2013-TRU]