Tuesday, May 14, 2013

[aaykarbhavan] cbec clarifies issues on Service Tax Amnesty scheme



 Circular No. 169/4 /2013 - ST
F. No. B1/19/2013-TRU
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
*****
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 Schemeclarifications 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 203
Regards
Prarthana Jalan


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