Admin 2 Dec

This Amnesty Scheme provides the defaulters with a golden opportunity to pay all their Service tax dues from the period 01.10.2007 to 31.12.2012 without interest, penalty and other legal proceedings including prosecution.

Therefore, in simple terms, any person may file a declaration in pursuance of this scheme to declare his tax dues for the period ranging between 01.10.2007 to 31.12.2012 (both dates included)

The procedure to be followed for filing declaration and thereafter its compliance has been laid out u/s 107 of the Chapter read with Rules 4, 5, 6 & 7 of the Service Tax Voluntary Compliance Encouragement Rules 2013.

A declaration under this scheme shall be submitted to the Designated Officer (DO). The form to be used for this purpose is Form VCES-1. This declaration shall have to be filed positively by 31.12.2013.

Upon receiving such a declaration the DO shall acknowledge the same by issuing a receipt in Form VCES-2 within a period of 7 working days from the date of receipt of declaration.

The declarant shall pay the tax as declared by him in Form VCES-1 as follows –

  • Not less than 50% of total tax dues – on or before 31.12.2013
  • Balance Tax dues shall be paid -
    • By 30.06.2014 – without interest
    • On and from 01.07.2014 – along with interest as applicable under the Act.
  • The declarant shall furnish particulars of such tax payment to the DO from time to time. With every such intimation, the declarant shall annex a copy VCES-2.
  • The declared tax dues cannot be paid by utilization of Cenvat Credit balance available with the declarant, if any

Immunity provided under this Amnesty Scheme

The newly enacted Section 108 of Chapter VI contains a very strong non-obstante clause which has an overriding effect on the complete Chapter V (service tax law) of the Finance Act 1994.

While providing immunity, it states that notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declared by him and the interest payable, shall get immunity from penalty, interest or any other proceeding under the Chapter.

Further the Section 108 also states that subject to the provisions of section 111, a declaration made shall become conclusive upon issuance of acknowledgement of discharge in Form VCES-3 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.

Consequences of making a wrong declaration

Before the expiry of one year from date of any declaration, if the Commissioner of Central Excise has reasons to believe that any declaration made under the VCES is substantially false, then after recording such reasons in writing he may service show cause notice. Upon serving of such Show Cause Notice, all provisions of Chapter V shall apply accordingly. Therefore, while making any declaration, every person must be extremely cautious as regards calculation of his tax dues.

This scheme is in force till 31st December 2013, unless extended further by the Government