FAQ ON VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME 2013 ( Service Tax )

[ANAND SHEMBEKAR]

Preface : While presenting budget 2013 , Hon. Finance Minister Govt. of India , announced the Service tax voluntary compliance encouragement scheme 2013. The Chapter VI of the Finance bill 2013 contains the VCES 2013. 

I tried to prepare the F.A.Q. on VECS 2013 of service tax in simple words.

Q. 1 I have not obtain the registration under rule 4 of the Service Tax Rules 1994 , can I join the VCES 2013 scheme?

Ans. The precondition for joining the VCES 2013 scheme is that person must obtain the registration to join the VCES 2013  So if you are not registered , first obtain the  registration by applying the in Form ST 1, electronically and submitting the  necessary documents. Only after obtaining the registration , you become eligible to file declaration under this scheme.

Q. 2 To whom shall I make the declaration for VCES 2013 ?

Ans. The declaration shall be made to the designated authority , who shall be an officer not below the Rank of Assistant Commissioner of Central Excise as notified by Commissioner of Central Excise for the purpose of this scheme.

Q. 3 For which period this scheme is applicable ?

Ans. The scheme is applicable for a period ranging from 01- October -2007 to 31-December-2012.

Q.4 What is the  meaning of the word ‘tax dues’ ?

Ans. Tax dues means Service tax , and cess leviable thereon under any other Act  ( for e.g. Education Cess  2% , SHED Cess 1% , R & D Cess )  or due or payable or any other amount due or payable under section 73 A for the period October -2007 to 31-Dec.-2012 but not paid as on 01-Mar-2013.

Q.5 I have received a notice on 28 th February 2013 regarding non payment of service tax, And till date I have not paid any service tax, shall I Join the Scheme?

Ans. NO. any person may declare his tax dues in respect of which no notice or an order of determination under Section 72 or Section 73 or Section 73 A of the Chapters had been issued or made  before the 1 –March-2013.

Q. 6 . Who are not eligible for the VCES 2013 ?

Ans. 1.  The person/s as mentioned in answer Q 5.

1. Person who has filed the service tax returns and disclosed his true service tax liability but not paid the disclosed amount of service tax or any part thereof shall not be eligible to make declaration for the period covered by the said return.

 Q.7.  Whether the designated authority can reject my declaration under VCES 2013?

  Ans. If any inquiry , investigation , issuance of summons , search of premises , production of  Accounts, audit is initiated and pending as on 1-March-2013 then designated authority shall by an order  and for reasons to be recorded in writing , reject such declaration.

Q. 8  In which form and when Shall I make a declaration for VCES 2013 ?

Ans.  You can make an declaration in FORM VCES – 1 in duplicate on or before 31-Dec-2013 to The designated authority. 

Q. 9 When I have to make the payment of service tax ?

Ans. You have to make the minimum 50% of the amount of tax dues on or before 31-Dec-2013 And balance of tax dues or part thereof on or before 30-June-2014 . However still you can make payment of balance tax dues or part thereof on or before 31-Dec-2014 with interest for a period of delay starting  from 01 –July -2014.

Q.10 Whether there is any provision stipulated in VCES 2013 relating to payment of service tax for the period starting from January 2013 and onwards ?

Ans. Yes , You have to pay the service tax and cesses thereon as per the normal provisions. If there is any default in making the payment , same shall be paid along with interest. In short   tax dues on or after January 2013 shall be paid as per the due dates .

Q.11 After filing of the declaration , shall I get acknowledgement from department ?

Ans. Yes after filing the declaration in FORM VCES -1, you will get acknowledgement  in FORM VCES – 2 within seven days . However this acknowledgement is on the basis of declaration filed by you , it does not certify the correctness of the declaration  made.

Q.12. Whether I shall get immunity from payment of late fee / penalty, interest on delayed payment of taxes  or for having not taken registration earlier or not filed the return or delay in filing the return?

Ans. Yes . It has been provided in VCES that besides interest and penalty , immunity would also be available from any other proceeding under the Finance Act 1994 and rules made there under. Refer circular No.169/4/2013 –ST dated 13 –May-2013 ,

Q.13. Is there in provision in VCES 2013 , regarding discharge certificate ?

Ans. After making full payment of taxes and interest if any for the payment made on or after 01-July-2014 and communicating the designated authority , designated authority will issue the acknowledgement of discharge in FORM VCES 3 after due verification.

Q.14. Whether I have to submit the calculation sheet showing service tax liability ?

Ans. Yes ,along with declaration in FORM VCES -1  , you have to submit the calculation sheet showing your service tax liability ,service wise and service tax return period wise, for this you may use the format prescribed in S.No. 3 F (I) of the service tax return in Form ST – 3.

Q. 15 I have filed the declaration and also paid the tax dues but later on I come to know that I have made the excess payment of service tax , in such case can I filed the refund claim.

Ans. Any amount paid in pursuance of a declaration made shall not be refundable. For such excess payment , you can not filed the refund claim.

Q.16  I have made a declaration , but later on I failed to pay the taxes in stipulated period What would be the consequences ?

Ans. Such tax dues shall be recovered under the  provisions of Section 87

Q. 17. Whether the  Central Excise and service tax department can taken action against false declaration made by the declarant.

Ans. Yes of course, the Commissioner of Central Excise has reasons to believe that declaration made by the declarant under this scheme was substantially false, he may , for reasons to be recorded in writing , serve a notice on declarant in respect of such declaration requiring him to show cause why he should not pay the tax dues not paid or short paid. Such action shall not  be taken after expiry of one year from the date of declaration.

Q.18 Can I use amount lying in Cenvat Credit Account for payment of tax dues under the Scheme?

Ans. No. Cenvat credit shall not be utilized for payment of tax dues under the scheme.

 Disclaimer : This F.A.Q.  is written for information only and reader should see the relevant Acts , rules , notifications ,  circulars issued by concerned department of Govt. of India. Neither author nor editor, printing or publishing this  article   in any mode including website  is responsible for loss suffered by any person due to the actions taken  on the  basis of thisF.A.Q.

Written by : Anand M Shembekar M.Com. ACMA 

                  Cost Accountant

                  Cell No. 9421187122