Lakshmikumaran & Sridharan 律师事务所An ISO 9001 / 27001 certified law firm

Service Tax Amnesty Scheme clarified

9th August, 2013

The Central Board of Excise & Customs (CBEC) has, by Circular No. 170/5/2013-ST, dated 8-8-2013, clarified certain issues relating to the amnesty scheme introduced through this year’s budget – Voluntary Compliance Encouragement Scheme or VCES. The bar on applicability of this scheme to those against whom summons have been issued or investigation is pending has been clarified as not applicable where only information has been sought from potential tax payers even if Section 14 of Central Excise Act has been quoted in the relevant communication. If inquiry, investigation or audit has been initiated after the cut-off date of 1-3-2013, declaration under VCES can be made.

The circular also clarifies that if the tax payer has two units having separate registration, the unit which has not been issued SCN will be eligible to avail VCES. Service tax paid by wrongly utilizing Cenvat credit is also covered under ‘tax dues’. This scheme is not applicable to those who have paid the tax but not filed their return. Dues paid in part before VCES was notified but where remaining part is covered under VCES, will not be covered for immunity from penalty/ interest under this scheme.

Amendment to incorrect declaration may be allowed by the Department if the same is discovered by the tax payer himself and amended declaration is filed before the cut-off date of 31-12-2013. Even if the declaration under VCES is not acknowledged by Department within 7 days, tax dues may be paid. The CBEC instructs the designated authority to issue a notice of intention to reject the declaration within 30 days of the date of filing of the declaration stating reasons and provide opportunity of hearing before passing order. The circular also clarifies that this scheme has no provision for filing appeal against order rejecting declaration.
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