F. No. B1/19/2013-TRU (Pt.), dated 11th December, 2013
The Service Tax Voluntary Compliance Encouragement
Scheme – Issues for Clarification – Reg.
The undersigned is directed to state
that the Board has issued clarifications on issues concerning various aspects
of the VCES, vide circulars dated 13.05.2013, 8.08.2013 and 25.11.2013. A FAQ
has also been issued on VCES. However,
certain instances have come to notice, as mentioned below, that the declarants
under the VCES are still facing difficulties.
2. In one instance, the Designated
Authority has asked a declarant, who has “tax dues” only for a part of the
period covered by the Scheme, to furnish an undertaking that he had no unpaid
“tax dues” for the remaining period covered by the Scheme. However, the Scheme
does not envisage furnishing of any such undertaking. A declarant may have tax
dues only for a part period covered by the Scheme. In terms of the Scheme a
declaration of tax dues has to be made in Form VCES-I, which includes an
undertaking that the information given in the declaration is correct and
complete. Therefore, the Designated Authority should not ask for any other
undertaking or declaration beyond what has been prescribed in the Scheme or
Rules made there under.
3. In another instance, the Designated
Authority has objected to the payment of the first tranche of 50%, payable by
31.12.2013, in installments. It is clarified that the Scheme only prescribes
that the declarant would pay a minimum amount of 50% of the tax dues by
31.12.2013. Rest of the payment may be made by 30.6.2014, without any interest,
and any amount remaining unpaid on 30.6.2014 shall be paid by 31.12.2014, with
interest for the period of delay beyond 30.6.2014. There is no bar to pay these
amounts in installments. For example a declarant may pay the 50% amount that he
is required to pay by 31.12.2013 in more than one installment. Therefore,
payment of 50% “tax dues” in lump-sum may not be insisted to.
4. In some instances, it has been observed
that the Designated Authority has raised frivolous/unnecessary queries as
regards the veracity and the manner of calculation of tax dues. While the
designated authority may cause arithmetical check as regards the correctness of
computation of tax dues, the Scheme does not envisage investigation by the
designated authority into the veracity of declaration. Only if the Commissioner
has reason to believe that the declaration filed by the declarant is
substantially false he may, for reasons to be recorded in writing, serve notice
on the declarant requiring him to show cause why he should not pay the tax dues
not paid or short-paid.
