FinMin notifies scheme to encourage service tax payment
May, 16th 2013
In an effort to boost revenue, the Finance Ministry has notified Service Tax Voluntary Compliance Encouragement Scheme. This will be a one time scheme.
It aims to cover nearly 10 lakh service tax assessees who have stopped filing tax returns. This scheme will be for non-filers too.
The assessees concerned will have to give a truthful declaration of all pending dues between October 1, 2007 and December 31, 2012.
It is clarified that the tax-payers will need to settle their dues for the period after December 31, 2012.
Under the scheme, the assessee will be given an opportunity to pay half of the dues by December 31 this year while remaining amount can be paid by June 30, 2014. There will be no interest, penalty or any proceeding. However, if dues remain as on July 1, 2014, the assessee will have to pay with interest by December 31.
This scheme will not cover any assessee against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit.
This new notification has come into effect after the President gave his assent to the Finance Bill following approval by both the Houses of Parliament.
Finance Minister P. Chidambaram, while announcing the Budget for 2013-14, had said that while there are nearly 17,00,000 registered assesses under service tax, only about 7,00,000 file returns. Many have simply stopped filing returns.
“We cannot go after each of them. I have to motivate them to file returns and pay the tax dues,” he mentioned. He hoped that this scheme would entice a large number of assesses to return to the tax fold besides collecting a reasonable sum of money.
Services tax levied on services except those which are in the negative list are at the rate of 12.36 per cent.
The Government is estimated to collect over Rs 1.32 lakh crore during 2012-13, while it aims to get over Rs 1.80 lakh crore during 2013-14.