Service Tax VCES, 2013 draws to a close
THE much hyped and advertised Voluntary Compliance Encouragement Scheme, 2013 comes to a close today.
The CBEC advertised it as a scheme providing the service tax assessee with a golden opportunity to pay all their ‘tax dues' for the period 01.10.2007 to 31.12.2012 without interest, penalty and other legal proceedings including prosecution.
The VCES was not without its share of controversies and the Board Circulars issued on the matter tried to apply a balm-like effect with some reasonable success.
The fourth and the fifth step for those who have opted for the scheme (as per the CBEC guidelines) are -
Step 4
The declarant is required to pay not less than 50% of tax dues on or before 31st December 2013. Balance on or before 30th June 2014 and if not paid, can be paid on or before 31st December 2014 along with interest from 1st July 2014.
Cenvat credit cannot be utilized for payment of dues (Rule 6(2)).
Amount paid shall not be refundable.
Step 5
On full payment of taxes, the designated authority will issue acknowledgement of discharge in VCES-3 within 7 working days from the date of furnishing of details of tax dues paid in full, along with interest if any. Last date for payment of first installment of 50% of total tax dues is 31.12.2013 and balance amount on or before 30.06.2014 or 31.12.2014 (with interest).
We, at TIOL, have carried innumerable capsules in this column and articles and have been successful in highlighting the issues ailing the scheme and the Board has responded well by issuing clarifications.
A lot of high profile arrests also followed of those who had evaded Service tax but had coolly collected it from their clients. The Anti-evasion machinery was in full gear and every other day crores were found to be evaded by service tax assessees. It seems that either every tax evader has been brought to book or the machinery has been dismantled for there is not much news on this front in the recent past.
It is a known fact that such revenue-gathering-enticing schemes are never appreciated by the honest tax payers but the government in all its wisdom has been coming out with such short-lived schemes in an effort to mop up revenue which has been cleverly concealed by erring taxpayers.
Disputes associated with VCES, 2013 would still surface in the coming days and become a beacon for any new schemes that may be given birth to in the future.
At the end of the day, what matters is what has been the fill in the treasury, which we will know soon.
There is no refund in the VCES under any circumstances. If you have made a declaration by mistake, the entire amount paid is forfeited and the balance amount payable will be recovered.