Friday, September 6, 2013

VCES - Voluntary pay your Service tax and get benefits.

Period: 1st October  2007 to 31st December  2012

Ø  The person
- Who has not received notice or order of determination u/s 72, 73 or 73A on or before 1st march 2013 is eligible under the scheme.
-  Against him If any inquiry, investigation or audit has been initiated after 1st march, he can avail the scheme.

Ø  The Person :
-       Who has filed service tax return but does not pay tax, he will be not eligible for the scheme.
-       Against him If any inquiry, investigation or audit has been initiated  and pending as on 1st march 13,

Ø  The Person :
-       Against him If any notice or order of determination has been issued for any period between October 07 to December 12, declaration cannot be made on same issue for any subsequent period. But if show cause notice has been issued prior to October  07, declaration can be made on same issue.

ü  Payment of tax:
-       Up to 31stdecember, 2013 : minimum 50% tax payment else not eligible for the scheme
-       Up to 30th June , 2014 : balance without interest
-       Up to 31st December 2014 :  balance with interest

(all payments without penalty and prosecution)

ü  Other major points :
·          If registration under service tax has not obtained, the person will be required to take registration before making such declaration. He will get immunity from penalty for not having registration.
·          If show cause notice has been received by a taxpayer for particular period during October 07 to December 12, he can file declaration for period not covered by notice.
·          The Tax Payer will be ineligible if an inquiry, investigation or for audit which is pending as on 1st march 13.  A notice for mere general communication for taxpayers’ business by department will not make him ineligible for scheme..
·          The eligibility for scheme will be determined separately for each unit If taxpayer has two units with separate service tax registration number,
·          For tax dues concerning an issue which is not a part of audit para the declaration  can be made by the tax payer.
·          If tax dues are paid by a person but he  has not filed  return, he is not eligible for the scheme to avoid penalty for late return filling.
·          If tax dues for part of the period of the scheme has been paid and same person has paid other part of the tax dues under VCES  scheme, he will be entitled for immunity from interest and penalty on tax dues which he has paid under scheme. If a person has paid 5 lacs for the period 1stOctober  07 to 31st December  11 on 1st jan 2013 and 20 lacs on 31st august  2013 under VCES  scheme for the  period 1st January  12 to 31st December 12. He will be entitled for immunity from interest and penalty for 20 lacs which he has paid under  VCES.
·          The Taxpayer can amend the declaration and correct it If there is any mistake in declaration and submit it before 31st December 2013.
·          The Declaration can be rejected after giving opportunity to taxpayer if authority finds declaration wrong and thereafter show cause notice for the tax dues may be issued by the authority.

·         Tax under VCES  should be paid in cash.