And What about Rewards under VCES? Informers Concerned!
WHILE the Department is worried about the success of the VCES and assessees are worried about the hidden agenda and further consequences, there is a small group of persons who are really worried that their efforts are going in vain.
The informers of the Department are concerned that they would lose the hefty rewards if the delinquent assessees go to the VCES route.
An informer wrote to us;
It is pertinent to mention here that while drafting the said scheme the department has totally ignored the interest of the informers who used to pass on the information to the department and department used to recover huge amount from the tax evaders.
Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made there under, and such inquiry or investigation is pending as on the 1st day of March, 2013. It means if the informer would have provided information on tax evasion after 1st March, 2013, he or she would not be eligible for reward under VCES, 2013 as existing reward guidelines provides that if show cause notice is not issued, informer would not be eligible for reward.
I am one of the potential informers have passed on number of duty and tax evasion cases to the officials of Indirect and Direct Tax departments all over India with successful result, have some doubt in my mind which I want to get clarified. The Ministry of Finance has announced aforesaid scheme to give immunity to the taxpayers who have outstanding tax between October 2007 to December 2012 and filed application under aforesaid amnesty scheme upto December 2013. However due to aforesaid provisions I have come to know that if aforesaid tax evader would file application under VCES, 2013, I would not be entitled for reward if the case is settled under VCES, 2013.
I would like to know whether the informer would be eligible for reward in the following circumstances:
(i) The cases booked by the officials of DGCEI/DGRI/Local Commissionerates based on information provided by the informer after 1st March 2013 in which the tax evader had filed applications for closure of the case under VCES, 2013.
(ii) Whether informer would be barred from payment of reward where the case has been booked on the basis of information provided by the informer and Government has recovered dues including interest for five years but the cases were closed by the department under section Rule 73(3) of the Service Tax Rules, 1994 and Section 11A(1)(b)(2) of the Central Excise Act, 1944.
This informer wanted us to do something to safeguard the interest of the informer so that informer will give quality cases to the department in which risk to life of the informer is involved.
It looks as if the informers have to take rest till December 31 2013.