Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
Circular No. 169/4 /2013 - ST
New Delhi, dated the 13th May, 2013
To,
Chief Commissioners of Central Excise and Customs (All),
Director General (Service Tax), Director General (Systems),
Director General (Central Excise Intelligence), Director General (Audit),
Commissioners of Service Tax (All), Commissioners of Central Excise (All),
Commissioners of Central Excise and Customs (All)
Madam/Sir,
Sub: The Service Tax Voluntary Compliance Encouragement Scheme-clarifications
regarding.
The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into
effect upon enactment of the Finance Bill 2013 on the 10th May, 2013. The
Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to
bring into effect the Scheme. Some references have been received seeking
clarification as regards the scope and applicability of the Scheme.
2. The issues have been examined and clarifications thereto are as follows:
| S. No. |
Issues |
Clarification |
| 1. |
Whether a person who has not obtained service tax registration so
far can make a declaration under VCES? |
Any person who has tax dues to declare can make a declaration in
terms of the provisions of VCES. If such person does not already have a
service tax registration he will be required to take registration before
making such declaration. |
| 2. |
Whether a declarant shall get immunity from payment of late
fee/penalty for having not taken registration earlier or not filed the
return or for delay in filing of return. |
Yes. It has been provided in VCES that, beside interest and penalty,
immunity would also be available from any other proceeding under the
Finance Act, 1994 and Rules made thereunder. |
| 3. |
Whether an assessee to whom show cause notice or order of
determination has been issued can file declaration in respect of tax
dues which are not covered by such SCN or order of determination?
|
In terms of section 106 (1) of the Finance Act, 2013 and second
proviso thereto, the tax dues in respect of which any show cause notice
or order of determination under section 72, section 73 or section 73A
has been issued or which pertains to the same issue for the subsequent
period are excluded from the ambit of the Scheme. Any other tax dues
could be declared under the Scheme subject to the other provisions of
the Scheme. |
| 4. |
What is the scope of section 106 (2)(a)(iii)?
Whether a communication from department seeking general information
from the declarant would lead to invoking of section 106 (2) (a)(iii)
for rejection of declaration under the said section? |
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 thereunder, and such inquiry or investigation
is pending as on the 1st day of March, 2013.
The relevant provisions, beside section 14 of the Central Excise Act
as made applicable to service tax vide section 83 of the Finance
Act,1994, under which accounts, documents or other evidences can be
requisitioned by the Central Excise Officer for the purposes of inquiry
or investigation, are as follows,-
(i) Section 72 of the Act envisages requisition of documents and
evidences by the Central Excise Officer if any person liable to pay
service tax fails to furnish the return or having made a return fails to
assess the tax in accordance with the provision of the Chapter or rules
made thereunder.
(ii) Rule 5A of the Service Tax Rules, 1994 prescribes for
requisition of specified documents by an officer authorised by the
Commissioner for the purposes specified therein.
The provision of section 106 (2)(a)(iii) shall be attracted only in
such cases where accounts, documents or other evidences are
requisitioned by the authorised officer from the declarant under the
authority of any of the above stated statutory provisions and the
inquiry so initiated against the declarant is pending as on the 1st day
of March, 2013.
No other communication from the department would attract the
provisions of section 106 (2)(a)(iii) and thus would not lead to
rejection of the declaration. |
3. Trade Notice/Public Notice may be issued to the field formations and tax
payers. Please acknowledge receipt of this Circular. Hindi version follows.
Yours sincerely,
(S. Jayaprahasam)
Technical Officer, TRU
Tel: 011-2309 2037
F. No. B1/19/2013-TRU