Friday 6 December 2013

Recent Updates on VCES - Service Tax


Clarification on VCES

 
A new Circular regarding VCES has been issued to clarify the doubts raised relating to VCES. The clarifications are mentioned below:

a) If an inquiry, investigation or audit, pending as on 1.3.2013 was being carried out for the part period i.e. 2008-2011, benefit of VCES would be eligible in respect of 'tax dues' for the period not covered by the inquiry, investigation or audit i.e. for the year 2012.

b) If an inquiry or investigation, pending as on 1.3.2013 was in respect of a specific issue, say renting of immovable property, benefit of VCES would be eligible in respect of 'tax dues' concerning any other issue in respect of which no inquiry or investigation was pending as on 1.3.2013.

c) In case designated authority has reasons to believe that the declaration filed by declarant is covered by section 106(2), a notice of intention to reject the declaration will be given to the declarant within 30 days from the date of filing of declaration stating reasons of rejection to give so as an opportunity of being heard before the rejection.

d) The designated authority may take a view on merit on the basis of facts and circumstances of each case as to whether the inquiry is of roving nature or whether the provisions of section 106 (2) are to be attracted.

e) Benefit of scheme would be available for payment of tax made after 10.05.2013 even though the declaration under the scheme has been made later on.

f) Benefit of scheme would not be available for waiver from penalty and other proceedings where service tax pertaining to the scheme along with interest has already been paid by the assessee.


[Notification No. 174/9/2013-ST dated 25.11.2013]

 
Union Finance Minister Chidambaram warned the service tax evaders saying the current amnesty scheme closes by month-end and that no further chances will be provided to comply with the tax regulations.  Saying that service providers cannot see a fair scheme than VCES, the finance minister said, "No interest, no penalty, no prosecution. I think this is a generous scheme. So utilize it and take advantage of it.


The last date of depositing at least 50% of the declared dues under VCES is 31st December, 2013.
 
Rahul Jain

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