Excel for Chartered Accountants
Service Tax Voluntary Compliance Encouragement Scheme 2013-Clarification
updated 11-12-2013
27-11-2013 | CA Ashutosh Lohani
What is VCES?
Eligibility to opt for the VCES
The Finance Act, 2013 brought Service Tax Compliance Encouragement Scheme (VCES) 2013 which provides for amnesty for service tax defaulters subject to certain conditions laid down. Under the scheme, the defaulters who as on the 1st day of March, 2013 have not paid service tax for the period beginning from the 1st day of October, 2007 and ending on the 31st day of December, 2012 (including cess) can opt for VCES and claim immunity from penalty, interest or other proceedings (including prosecution) as provided in the scheme.
However few exceptions have been provided for being eligible to opt for the VCES. The following person are not eligible under the scheme:
(a) A person on whom notice or an order of determination has been issued or made on or before 01-03-2013.
(b) A person who has furnished return and disclosed his true liability, but has not paid the full service tax.
(c) A person against whom an audit, investigation or inquiry has been initiated which is pending as on 01-03-2013
Procedure under VCES
(a) The time limit for making the declaration is 31-012-2013.
(b) Eligible person can make a declaration in duplicate in Form VCES-1 (VCES Rules, 2013)
(c) The designated authority shall acknowledge the declaration in form VCES-2 (VCES Rules, 2013)
(d) The declarant shall, on or before 31-12-2013 pay not less than fifty per cent of the tax dues and submit proof of such payment to the designated authority.
(e) The remaining tax shall be paid on or before the 30-06-2014. However the said tax can be paid up to 31-12-2014 along with interest.
(f) On furnishing the details of full payment of declared tax dues and the interest, if any, the designated authority shall within seven days issue an acknowledgement of discharge in VCES-3 (VCES Rules, 2013)
(g) The CENVAT credit shall not be utilised for payment of tax dues under the Scheme.
(h) Any tax paid under VCES shall not be refundable under any circumstances.
(i) Any tax dues, if not paid either fully or in part, as declared under VCES along with interest shall be recoverable from the declarant.
Processing of declarations at VCES Cells
Each Commissionerate have issued Standing orders detailing the procedure to process the applications under VCES. These Standing orders generally provides among other things as under:
(a) There shall be a VCES Cell in the Service Tax Cell to exclusively receive declarations under VCES
(b) The particulars of the VCES-1 declarations received by the VCES cell, shall be entered on the same day in a register
(c) In case of any deficiency like incomplete details, wrong calculation of Service Tax or wrong application of Service Tax rate etc., the Superintendent of VCES cell shall issue a deficiency memo to the applicant with the approval of the Designated Authority within 2 working days of the receipt of the Declaration.
(d) While making entries in the VCES register, the VCES cell shall enter the Declarations in a serial order and the particular serial number allotted to the Declaration shall form the basis of assigning the number to the Declaration. The Superintendent VCES cell shall verify the correctness of the Declaration and put up the declaration file after due examination to the Designated Authority within 3 working days
(e) Acknowledgement in the Form VCES-2 shall be issued to the Declarant within 7 working days from the date of receipt of declaration (whether or not a deficiency memo has been issued and whether or not a reply in compliance thereof has been
received). The Acknowledgement will be dispatched at the address indicated in the declaration by Speed Post AD only
(f) The VCES Cell shall forward the copy of declaration with all enclosures to the specified sections of the Commissionerate and also to the zonal offices of D.G.C.E.I so as to decide the eligibility or otherwise of the applicant under the Scheme
Frequently asked Questions-VCES
Central Board of Excise and Customs has from time to time issued circulars, 169/4/2013 and 170/5/2013 clarifying various issues under VCES.
L
atest in this category is the circular no 174/9/2013 dated 25-11-2013. All the three circulars have been issued in FAQ format.According to the said circular no 174/9/2013, in a recently held an interactive sessions at Chennai, Delhi and Mumbai, certain queries and apprehensions were raised and expressed
and to address these issues the circular has been issued.
Further Clarifications by CBEC dated 11-12-2013:
CBEC has vide its Instruction dated 11-12-2013 further clarified certain issues on which tax payers were facing difficulties. The issues clarified are:
1. That a declarant may have tax dues only for a part period covered under the scheme.
2. That the declarant may pay the amount of taxes in installment within the time limit prescribed.
3. That the designated authority can not investigate the veracity of the declaration but can verify the
airthmetical accuracy.
Download CBEC Instruction dated 11-12-2013 >>
Downloads
Download consolidated text of all the three circulars >>
Download text of VCES-2013 under Finance Act, 2013 >>
Download VCES Rules, 2013 >>
Download VCES-1 >>
