Service Tax - Discharge Certificate under VCES and availment of CENVAT credit - CBEC Clarifies
CLARIFICATION has been sought from the Board as to whether the first instalment of tax dues paid under Voluntary Compliance Encouragement Scheme (VCES), 2013 would be available as CENVAT Credit immediately after payment or CENVAT credit can be availed only after payment of tax dues in full and receipt of Acknowledgement of Discharge in form VCES-3.
Board clarifies:
As per VCES, under Section 108 (2) of the Finance Act, 2013, a declaration made under Section 107 (1) shall become conclusive only upon issuance of acknowledgement of discharge under Section 107 (7). Further, in terms of Rule 7 of the Service Tax VCES Rules 2013, the acknowledgement of discharge in form VCES-3 shall be issued within a period of 7 working days from the date of furnishing of details of payment of tax dues in full along with interest, if any, by the declarant.
It would be in the interest of VCES declarants to make payment of the entire service tax dues at the earliest and obtain the discharge certificate within 7 days of furnishing the details of payment. As already clarified in the answer to question No.22 of FAQ issued by CBEC dated 08.08.2013, eligibility of CENVAT credit would be governed by the CENVAT Credit Rules, 2004 .
Board has advised the Chief Commissioners that upon payment of the tax dues in full, along with interest, if any, they should ensure that discharge certificate is issued promptly and not later than the stipulated period of seven days.
Please note that even now the Board is not confirming that the amount paid under VCES can be taken as CENVAT credit by the service recipient. When I asked a Chief Commissioner whether it would be allowed, he laughed it off and said the VCES volunteers should forget it.
Do we need a great Board to tell us that it is governed by CENVAT Credit Rules? Who does not know it? Why can't they say Yes or No ?
Circular No., Dated: January 20, 2014