Service Tax Voluntary Compliance
Encouragement Scheme, 2013
Ms. Shobha L. Chary, Member, CBECInteraction with various Trad...
Salient Features of The Scheme
• One time amnesty to be provided by way of:
(i) waiver of interest and penalty; and
(ii) i...
Legal Provisions
FINANCE ACT, 2013
CHAPTER VI: Service Tax Voluntary Compliance
Encouragement Scheme, 2013

Service Tax Vo...
I. Who can make declaration of Tax
dues under the Service Tax VCES,
2013?

www.simpletaxindia.net
DECLARATION OF TAX DUES

• Any person may declare his tax dues
in respect of which:
no notice or an order of determinatio...
TAX DUES:MEANING
Service tax due or payable under the Finance Act
or any other amount due or payable under Section
73A the...
Persons not eligible to make
declaration of Tax dues
Where a notice or order of determination issued
to a person in respec...
Illustration
 Return filed for the period 01.10.2007 to
31.03.2008 but not paid service tax for the
period. Thereafter ne...
Which declarations are liable for
rejection by the Designated
Authority?

www.simpletaxindia.net
Declaration made by Person:
Against whom an inquiry or investigation
has been initiated
SEARCH OF PREMISES
ISSUANCE OF SUM...
REJECTION contd…
and such inquiry, investigation or audit
is pending as on the 1st day of March,
2013, then,
the designat...
PROCEDURE FOR MAKING
DECLARATION AND PAYMENT OF
TAX DUES

www.simpletaxindia.net
Step -1 : Registration

• Any person, who wishes to make a
declaration under the Scheme, shall,
if not already registered,...
Step – 2 :Submission of Declaration

Submit a declaration to the
designated authority.
–on or before the 31st day of
Decem...
Step: 3 Acknowledgment of Declaration

• The designated authority shall
acknowledge the declaration
–In form VCES -2.
–Wit...
Step -4 Payment

• The declarant shall–on or before the 31st day of
December, 2013,
pay not less than 50%, of the tax
due...
Step: 4 contd..

• Remaining tax dues - on or before the
30th day of June, 2014.
If not paid then…
• along with interest t...
Note…

• Any service tax which becomes
due or payable by the declarant
for the month of January, 2013
and subsequent month...
Step: 4 contd..

• furnish details of payment made from
time to time along with a copy of
acknowledgement issued to him.

...
Step: 5 Acknowledgement of Discharge

On furnishing the details of full
payment of declared tax dues
and the interest, if ...
Benefits of the Scheme

www.simpletaxindia.net
1.

IMMUNITY FROM PENALTY, INTEREST AND OTHER
PROCEEDING

• The declarant, upon payment of the
tax dues and the interest, ...
2. Declaration to be Conclusive
• (2) Subject to the provisions of section 111, a declaration
shall become conclusive upon...
FAILURE TO MAKE TRUE DECLARATION
• Where the Commissioner has reasons to
believe that the declaration under this
Scheme wa...
WHETHER THE AMOUNT PAID UNDER THE
SCHEME CAN BE REFUNDED?

• Any amount paid in pursuance of a
declaration made under the ...
WHAT IF THE TAX DUES ARE DECLARED
BUT NOT PAID?

• Where the declarant fails to pay
the tax dues, either fully or in
part,...
Steps for Making Declaration
1. Declaration in respect of tax dues
to be made in Form VCES -1

2. The Designated Authority...
CBEC’s clarifications on certain
apprehensions of the Trade and
public at large.

Circulars and FAQs available in the webs...
clarification
Whether a person who has not
obtained service tax registration so far
can make a declaration under VCES?
• Y...
Clarification
Whether a declarant shall get immunity from
payment of late fee/penalty for having not
taken registration ea...
Clarification
Whether an assessee to whom show cause
notice or order of determination has been
issued can file declaration...
Whether a communication from department seeking
general information from the declarant would lead to
invoking of section 1...
Clarifications
An assessee has two units
at two different locations,
say
Mumbai
and
Ahmedabad. Both are
separately registe...
Clarification

Whether
upon
filing a declaration
a
declarant
realizes that the
declaration filed
by
him
was
incorrect
by
m...
Clarifications

Whether a party,
against whom an
inquiry, investigation
or audit has been
initiated
after
1.3.2013 (the cu...
Clarifications
There was a default
and a Show Cause
Notice was issued for
the period prior to the
period covered by the
Sc...
VCES Applications as on 20.09.2013
No. of
Applications
received upto
20.09.2013

Amount
Involved (In
Rs. Crore)

Vadodara ...
Services where maximum Declarations
have been made so far.
Declarations Made from
Services

Expected from

• Commercial
/r...
www.simpletaxindia.net
www.simpletaxindia.net
Section 72: Best Judgment Assessment
• If any person, liable to pay service tax –
(a) fails to furnish the return under se...
Section 73 . Recovery of Service tax not levied or
paid or short levied or short paid or erroneously
refunded
(1) Where an...
Section 73A
Service Tax collected from any person to be
deposited with Central Government.

www.simpletaxindia.net
Upcoming SlideShare
Loading in …5
×

Vces 10.10.2013 publish ppt

2,833 views

Published on

Published in: Technology, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,833
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
142
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Vces 10.10.2013 publish ppt

  1. 1. Service Tax Voluntary Compliance Encouragement Scheme, 2013 Ms. Shobha L. Chary, Member, CBECInteraction with various Trade Associations On 23.09.2013 www.simpletaxindia.net
  2. 2. Salient Features of The Scheme • One time amnesty to be provided by way of: (i) waiver of interest and penalty; and (ii) immunity from prosecution, to  the stop filers,  non-filers or  non-registrants or  service providers (who have not disclosed true liability in the returns filed by them during the period from October 2007 to December 2012). www.simpletaxindia.net
  3. 3. Legal Provisions FINANCE ACT, 2013 CHAPTER VI: Service Tax Voluntary Compliance Encouragement Scheme, 2013 Service Tax Voluntary Compliance Encouragement Rules, 2013 BOARD’S CIRCULAR NOs. 169/4/2013-ST dated 13.05.13 & 170/5/2013-ST dated 08.08.13. www.simpletaxindia.net
  4. 4. I. Who can make declaration of Tax dues under the Service Tax VCES, 2013? www.simpletaxindia.net
  5. 5. DECLARATION OF TAX DUES • 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 73A has been issued or made before the 1st day of March, 2013. www.simpletaxindia.net
  6. 6. TAX DUES:MEANING Service tax due or payable under the Finance Act or any other amount due or payable under Section 73A thereof. Including the Cess payable under any other Act for the time in force. Payable for the period beginning from the 1st October, 2007 to December 31, 2012 But not paid as on 1st March, 2013 www.simpletaxindia.net
  7. 7. Persons not eligible to make declaration of Tax dues Where a notice or order of determination issued to a person in respect of any period on any issue – no declaration possible on the same issue for any subsequent period. Filed return and disclosed his true liability but has not paid the disclosed amount of Service Tax. www.simpletaxindia.net
  8. 8. Illustration  Return filed for the period 01.10.2007 to 31.03.2008 but not paid service tax for the period. Thereafter neither filed their returns nor paid the service tax liability? Are they eligible to opt for the scheme? If so, to what extent?  They cannot opt for the scheme for the period 01.10.2007 to 31.03.2008.  They can opt for the scheme for the period from 01.04.2008 to 31.12.2012. www.simpletaxindia.net
  9. 9. Which declarations are liable for rejection by the Designated Authority? www.simpletaxindia.net
  10. 10. Declaration made by Person: Against whom an inquiry or investigation has been initiated SEARCH OF PREMISES ISSUANCE OF SUMMONS REQUIRING PRODUCTION OF ACCOUNTS, DOCUMENTS OR OTHER EVIDENCE Audit has been initiated www.simpletaxindia.net
  11. 11. REJECTION contd… and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shallby an order, and for reasons to be recorded in writing, reject such declaration. www.simpletaxindia.net
  12. 12. PROCEDURE FOR MAKING DECLARATION AND PAYMENT OF TAX DUES www.simpletaxindia.net
  13. 13. Step -1 : Registration • Any person, who wishes to make a declaration under the Scheme, shall, if not already registered, take registration. • Website: www.aces.gov.in www.simpletaxindia.net
  14. 14. Step – 2 :Submission of Declaration Submit a declaration to the designated authority. –on or before the 31st day of December, 2013 –in Form VCES-1. www.simpletaxindia.net
  15. 15. Step: 3 Acknowledgment of Declaration • The designated authority shall acknowledge the declaration –In form VCES -2. –Within seven working days from the date of receipt of declaration. www.simpletaxindia.net
  16. 16. Step -4 Payment • The declarant shall–on or before the 31st day of December, 2013, pay not less than 50%, of the tax dues so declared and submit proof of such payment to the designated authority. www.simpletaxindia.net
  17. 17. Step: 4 contd.. • Remaining tax dues - on or before the 30th day of June, 2014. If not paid then… • along with interest thereon by 31.12.2014 for the period of delay starting from 1st day of July, 2014. www.simpletaxindia.net
  18. 18. Note… • Any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months –shall be paid by him in accordance with the provisions of the Chapter along with interest, if any, for delay. www.simpletaxindia.net
  19. 19. Step: 4 contd.. • furnish details of payment made from time to time along with a copy of acknowledgement issued to him. Utilisation of CENVAT Credit not allowed for payment of dues!!! www.simpletaxindia.net
  20. 20. Step: 5 Acknowledgement of Discharge On furnishing the details of full payment of declared tax dues and the interest, if any• the designated authority shall issue an acknowledgement of discharge of such dues to the declarant in Form VCES-3. www.simpletaxindia.net
  21. 21. Benefits of the Scheme www.simpletaxindia.net
  22. 22. 1. IMMUNITY FROM PENALTY, INTEREST AND OTHER PROCEEDING • The declarant, upon payment of the tax dues and the interest, if any,, shall get immunity from penalty, interest or any other proceeding under the Chapter. www.simpletaxindia.net
  23. 23. 2. Declaration to be Conclusive • (2) Subject to the provisions of section 111, a declaration shall become conclusive upon issuance of acknowledgement of discharge and no matter shall be reopened thereafter in any proceedings under the Chapter before any authority or court relating to the period covered by such declaration. www.simpletaxindia.net
  24. 24. FAILURE TO MAKE TRUE DECLARATION • Where the Commissioner has reasons to believe that the declaration under this Scheme was substantially false, he may, serve notice on the declarant requiring him to show cause why he should not pay the tax dues not paid or short-paid. • No action shall be taken after the expiry of one year from the date of declaration. www.simpletaxindia.net
  25. 25. WHETHER THE AMOUNT PAID UNDER THE SCHEME CAN BE REFUNDED? • Any amount paid in pursuance of a declaration made under the scheme shall not be refundable under any circumstances. www.simpletaxindia.net
  26. 26. WHAT IF THE TAX DUES ARE DECLARED BUT NOT PAID? • Where the declarant fails to pay the tax dues, either fully or in part, as declared by him– such dues along with interest thereon shall be recovered. www.simpletaxindia.net
  27. 27. Steps for Making Declaration 1. Declaration in respect of tax dues to be made in Form VCES -1 2. The Designated Authority to issue acknowledgement in Form VCES-2 3. Payment of dues and submission of proof of Payment by the Declarant. 4. The designated authority to issue an acknowledgement of discharge in Form VCES - 3 www.simpletaxindia.net
  28. 28. CBEC’s clarifications on certain apprehensions of the Trade and public at large. Circulars and FAQs available in the website: www.cbec.gov.in www.simpletaxindia.net
  29. 29. clarification Whether a person who has not obtained service tax registration so far can make a declaration under VCES? • Yes. He will be required to take registration before making such declaration. www.simpletaxindia.net
  30. 30. Clarification 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. Immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made there under. www.simpletaxindia.net
  31. 31. Clarification 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? • The tax dues in respect of which any SCN 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 can be declared. www.simpletaxindia.net
  32. 32. 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? • The provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts/documents / evidences are requisitioned from the declarant under statutory provisions(SECTION 14, SECTION 72,RULE 5A) and the inquiry so initiated is pending as on the 1 st day of March, 2013. • No other communication from the department would not lead to rejection of the declaration. www.simpletaxindia.net
  33. 33. Clarifications An assessee has two units at two different locations, say Mumbai and Ahmedabad. Both are separately registered. The Mumbai unit has received a Show Cause Notice for non-payment of tax on a revenue stream but the Ahmedabad unit has not. Whether the Ahmedabad unit is eligible for VCES? • The Ahmedabad unit that has not been issued a show cause notice shall be eligible to make a declaration. www.simpletaxindia.net
  34. 34. Clarification Whether upon filing a declaration a declarant realizes that the declaration filed by him was incorrect by mistake? Can he file an amended declaration? • In case the mistake is discovered suomoto by the declarant himself, he may approach the designated authority. Amended declaration to be furnished by declarant before 31.12.2013. www.simpletaxindia.net
  35. 35. Clarifications Whether a party, against whom an inquiry, investigation or audit has been initiated after 1.3.2013 (the cutoff date) can make a declaration under the Scheme? www.simpletaxindia.net •Yes. There is no bar from filing of declaration in such cases.
  36. 36. Clarifications There was a default and a Show Cause Notice was issued for the period prior to the period covered by the Scheme, i.e. before Oct 2007. Whether declaration can be filed for default on the same issue for the subsequent period? • Issuance of a show cause notice for any period prior to Oct 2007, on an issue, would not make a person ineligible. Declaration can be made under VCES. www.simpletaxindia.net
  37. 37. VCES Applications as on 20.09.2013 No. of Applications received upto 20.09.2013 Amount Involved (In Rs. Crore) Vadodara Zone 204 All India 3083 Amount paid so far No. Amount 28.08 17 0.80 788 507 60 www.simpletaxindia.net
  38. 38. Services where maximum Declarations have been made so far. Declarations Made from Services Expected from • Commercial /residential Construction Services, BAS, BSS, WC, GTA, ECI, Consulting engineers , Repair and maintenance, • Renting of immovable premises, Manpower supply, site preparation, security services, Commercial/residential Construction, cargo handling, coaching services, event management, mandap keepers, supply of tangible goods www.simpletaxindia.net
  39. 39. www.simpletaxindia.net
  40. 40. www.simpletaxindia.net
  41. 41. Section 72: Best Judgment Assessment • If any person, liable to pay service tax – (a) fails to furnish the return under section 70; (b) having made a return, fails to assess the tax in accordance with the provisions of this Chapter or rules made there under, the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.] www.simpletaxindia.net
  42. 42. Section 73 . Recovery of Service tax not levied or paid or short levied or short paid or erroneously refunded (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the [Central Excise Officer] may, within ‘eighteen months’ from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice, (2) In case of fraud, misstatement etc…within 5 years www.simpletaxindia.net
  43. 43. Section 73A Service Tax collected from any person to be deposited with Central Government. www.simpletaxindia.net

×