VCES, 2013 and section 87 of FA, 1994
WE received this in our mail-box -
"Pursuant to the enactment of the Finance Bill, 2013, on 10th May, 2013, the VCES, 2013 has come into force. Except for the issuance of the notification 10/2013-ST dt. 13/05/2013 framing the Service Tax Voluntary Compliance Encouragement Rules, 2013 and the Circular 169/4/2013-ST dated 13/05/2013 carrying clarifications to four self-made questions, it seems there is not much enthusiasm amongst the Trade and the officers concerned to goad the so-called non-filers/stop-filers from reaping (or ripping) the benefits of the Voluntary Scheme.
A few pertinent issues have been raised in , 2105 & 2106 and it would be prudent on the part of the Board to come out with fresh Circulars before the VCES, 2013 actually gets going.
At the same time, I have some doubts on the following VCES issue -
+ Section 110 of the FA, 2013 mentions that if 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 under the provisions of section 87 of the FA, 1994. Once the scheme has been anointed as "Voluntary Compliance Encouragement Scheme", hounding a declarant or the service recipient etc. for getting the "tax" is totally unfair and against the tenets of the concept of voluntary disclosure.
+ And assuming that the department recovers the tax dues by usage of section 87 of the FA, 1994, will the declarant get any immunity from penalty, interest or any other proceeding under the Chapter V of the Finance Act, 1994. The answer probably lies in the NEGATIVE for the reason that section 108(1) of the FA, 2013 grants such immunities if the "declarant, on his own, pays the tax dues declared by him under sub-section (1) of section 107 and the interest payable under the proviso to sub-section (4) thereof".
So, in spite of the department getting the entire amount of "tax dues" declared under the VCES, 2013, after having recourse to section 87 of the FA, 1994, the declarant is the loser inasmuch he will not get any immunity.
With all this Negativity in the VCES, will anyone be interested in laying his cards on the table? He would prefer to hold it close to his chest and bid his time."
DDT feels that the Board should hold interactive seminars on the VCES, 2013 so that the doubts in the minds of the "potential declarants" are clarified.