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"Service Tax Voluntary Compliance Encouragement Scheme,2013"

 

- Article Contributed by Sarabjeet Chawla

1.    Brief

Amnesty scheme is declared in budget 2013-14 for non-filers, stop filers, irregular filers, non-registrants and defaulters of payment. It is applicable to all tax payers without any monetary limits and is open for a substantial period.

2.    Eligible Amount

Following unpaid “tax dues” as on 1st Mar-2013

·       Service Tax  due or payable

·       Amount collected as service tax but not paid

3.    Eligible Period

·       Period commencing from 1st Oct-07

·       Period ending on 31st Dec-12

4.    In-eligibility for Declaration

(A) No declaration may be made for tax dues in case of issuance of following issued before 1st Mar-2013:

·       Show Cause Notice (SCN)

·       Best Judgment Assessment u/s 72

·       Order u/s 73

·       Order u/s 73A for deposit of service tax collected but not deposited

(B) No declaration can be made in following cases:

·       Return filed and disclosed true liability in return but unpaid [As a corollary if incorrect return was filed, then declaration may be filed for the amount unpaid and undeclared]

·       Period involving an issue, for which an order or SCN is already issued in any previous period.

(C) Declaration in following cases is liable to be rejected by the designated authority

·       Pending enquiry or investigation as on 1st March 2013 [for non/ short payment of tax] initiated by way of:

o   Search of premises u/s 82

o   Issuance of summon u/s 14 of CEA,1944

o   Production of accounts/ records or other evidence

 

·       Audit has been initiated before 01-Mar-2013

5.    Filing Declaration

·       Time Period: Declaration filed on or before 31-Dec-2013

·       Filed before: Designated authority ie. An authority not below Assistant Commissioner

·       Form: Declaration form and acknowledgement to be notified

6.    Schedule of Payment

·       At least 50% of the declared amount to be paid on or before 31-Dec-2013

·       Balance amount on or before 30-Jun-2014 [with interest from 01-Jul-2014 to 31-12-2014]

7.    Declaration conclusive

·       On furnishing proof of above payments, designated authority to issue an acknowledgement in specified form of full payment of declared tax and interest.

·       Declaration conclusive on issuance of acknowledgement

8.    Immunities granted

Declarant enjoys immunity from following after paying declared amount as above:

·       Penalty

·       Interest

·       Late fees for filing return

·       Prosecution

·       Concluded matter not to be reopened before any authority or court

9.    False Declaration

Commissioner may issue a show cause notice within one year of filing declaration for payment of tax if it is believed that declaration is “substantially false”.

10. Miscellaneous

·       No refund: Amount deposited in pursuance of declaration cannot be refunded

·       Unpaid amount: Can be recovered u/s 87 as a) From Refunds, b) From Debtors, Bank etc. c) distraining any movable or immovable property

11. Undue hardship:

·       Denying benefit to a person merely on ground that any letter was issued in past.

·       Scheme is silent about extending benefit to persons who don’t have any tax dues as they are below the threshold limit (presently 10 lacs) and not  filing returns.

·       A person to whom SCN/ OIO is issued on incorrect grounds, be it incorrect category or valuation will be ineligible for filing declaration.