If you are a service provider but yet to shell out your service tax, then paying at least half of the total tariff before December 31 under the Voluntary Compliance Encouragement Scheme (VCES), 2013 would save you from any interest or penalty.
In fact, with a 12% service tax levied on all services having over Rs 10 lakh annual turnover, except the few mentioned in the negative list, the central excise and service tax commissionerate, Patna, is trying to net in potential defaulters. Taxmen are eyeing services such as coaching institutions, restaurants and hotels, construction services, security and other manpower supplying agencies, those renting property for commercial purposes, tent and catering services etc and urging them to take advantage of the VCES to avoid prosecution.
Till now, only 109 persons in Bihar and Jharkhand have come forward to register for paying service tax under the scheme. "Starting this year, the provision of arresting service tax defaulters has also been made. In fact, those who fail to avail the VCES would have to pay 100% tax amount as penalty and there are provisions for prosecution," said Lipika Majumdar Roy Choudhury, member (service tax) and zonal member, Central Board of Excise and Customs, at a seminar on 'Service tax' here on Thursday.
Citing communication gap as one of the major reasons for the lukewarm response to the VCES in Bihar and Jharkhand, Choudhury said, "If you have any query or troubles relating to service tax, do not hesitate to approach the commissionerate."
Choudhury, who was on her maiden visit to the state capital, interacted with a select group of businessmen and representatives of various associations of service providers at Bihar Chamber of Commerce and Industries (Bpremises.
Zonal chief commissioner, Central Excise and Service tax, M D Singh, also urged service providers to voluntarily register themselves to avoid facing statutory action. "In total, there are only 36,000 assessees in Bihar and Jharkhand who are registered for central excise payment while the corresponding figure for service taxpayers stands at 2,900," said Singh.
During the interaction, taxpayers raised issues troubling them. A major trouble in construction sector was availing completion certificates of apartments while queries relating to nitty-gritty of the tax provisions also surfaced on the occasion, to which the officials assured to look into the matter.
The BCCI members presented a three-point memorandum to Choudhury listing problems and suggestion relating to service tax payment.
Increase in the threshold limit of exemption from Rs 10 lakh to Rs 25 lakh.
Compounding service tax liability in case of small service providers and exempting them from filing multiple returns.
Authorizing architects, chartered engineers or licence surveyors to issue completion certificates in construction related activity.