Service Tax Voluntary Compliance Scheme

[CA Rahul Jain]

The Finance Act, 2013 has provided amnesty scheme namely Service Tax Voluntary Compliance Encouragement Rules, 2013 for following persons:

• Stop filers

• Non Filers

• Non Registrants

• Service providers who have not disclosed there full liability in the return filed by them.

The period covered under this rule is from Oct’2007 to Dec’ 2012

Who is not eligible to make declaration under these rules: 

• 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.

• Person who has already furnished return and disclosed the amount of service tax payable, but has not paid the service tax. The declaration shall not be made for that period.

Procedures to comply with VCES:

• Registration is mandatory. If a person is not registered under Service Tax, he must first apply for registration and thereafter he can make declaration under this scheme.

• Declaration in Form VCES-1 before 31-12-2013.

• Acknowledgement of declaration in Form VCES-2 by the department within 7 days of filing the declaration.

• Tax payable without interest and penalty should be paid but Cenvat credit shall not be utilized for payment of tax dues.

• Minimum 50% of dues to be paid before 31-12-2013, and balance before 30-06-2014.

• If the declared tax is not paid before 30-06-2014, interest is charged on the balance amount. In any case, whole of the amount is to be paid before 31-12-2014

• Acknowledgement of discharge shall be issued in Form VCES-3 by the department within 7 days from the date of furnishing of details of payment of tax dues in full along with the interest, if any.

Other Important Points:

• Any amount paid under this scheme is not refundable under any circumstances

• On issue of acknowledgement of discharge, no matter shall be reopened thereafter in any proceedings before any authority or court relating to period covered by such declaration.

• However, if CCE has reasons to believe that the declaration made by a declarant is substantially false, he may reopen the case. But no action can be taken after expiry of 1 year from the date of declaration.

 CA Rahul Jain

[email protected]

Discussions to this article

[saurabh rairikar]

Thank you Sir, for a brief flash on the STVCES. I however, have a query which I request you to clarify.

Though payment under this scheme cannot be done through utilization of CENVAT Credit; Can the  credit of amounts paid by service provider under this scheme be availed (by the service receiver) on the basis of debit note raised by the service provider subsequent to the payments under this scheme but pursuant to the agreement. I request you to bestow your valuable views in the matter.