Dated : 12.06.2013
Trade Notice No.01/2013–Service Tax/SH
Dated, Shillong the 6th June, 2013
Subject: The Service Tax Voluntary Compliance Encouragement
Attention of the members of Trade, Industry and all others
concerned are hereby invited to the Trade Notice No.01/2013 – Service Tax/SH
and also the CBEC, New Delhi (TRU) Circular No.169/4/2013–ST dated
13.05.2013 issued under F.No.B1/19/2013-TRU regarding Service Tax
Voluntary Compliance Encouragement Scheme.
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 issues have been examined and clarifications thereto are as follows:
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.
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.
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.
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,-
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.
Hindi version of the
Trade Notice will follow.
No.169/4/2013-ST issued vide F.No.B1/19/2013-TRU dated 13.05.2013.
Disclaimer: Though care
has been taken to reproduce the text in its original form, in case of any
inadvertent mistake, the above mentioned Circular may be referred to.