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Amnesty Scheme in Service Tax is operational

15th May, 2013

An amnesty scheme ‘Voluntary Compliance Encouragement Scheme’ has become operational from 10th May, 2013 consequent to issuance of related rules. The Central Board of Excise & Customs has issued Notification No. 10/2013-S.T., dated 13-5-2013 framing the Service Tax Voluntary Compliance Encouragement Rules, 2013.  

No penalty or prosecution

The scheme, part of Budget 2013 proposals and now contained in Finance Act, 2013, provides for waiver of interest and penalty besides other action like prosecution.

Who can apply

The amnesty scheme is applicable to only those having tax dues between the period 1st October, 2007 and 31st December, 2012 and the same remain unpaid on 31st March, 2013. To avail benefit of the scheme, declaration as prescribed under the rules is required to be filed and registration under Service Tax law shall be obtained, if the same is not taken already.

Ineligible categories

The scheme excludes cases where tax dues in respect of which any show cause notice or order has been issued or which relates to the same issue for the subsequent period. Persons against whom inquiry or investigation has been initiated or whose premises has been searched or audit has been initiated and the same is pending as on 31st March, 2013, are not eligible for deriving benefit out of VCES. The designated authority shall reject the declaration in such cases.  

Due date

The due date for filing declaration is 31st December, 2013 and 50% dues shall be paid by this date. As per the rules, Cenvat credit shall not be utilised for payment of dues under this scheme.    
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