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 Scheme-
clarifications 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. Issues Clarification
No.
1 Whether a person who has not Any person who has tax dues to declare can
obtained service tax make a declaration in terms of the provisions of
registration so far can make a VCES. If such person does not already have a
declaration under VCES? service tax registration he will be required to
take registration before making such
declaration.
2 Whether a declarant shall get Yes. It has been provided in VCES that, beside
immunity from payment of late interest and penalty, immunity would also be
fee/penalty for having not available from any other proceeding under the
taken registration earlier or Finance Act, 1994 and Rules made thereunder.
not filed the return or for delay
in filing of return.
3 Whether an assessee to whom In terms of section 106 (1) of the Finance Act,
show cause notice or order of 2013 and second proviso thereto, the tax dues in
determination has been issued respect of which any show cause notice or order
can file declaration in respect of determination under section 72, section 73 or
of tax dues which are not section 73A has been issued or which pertains to
covered by such SCN or order the same issue for the subsequent period are
of determination? 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 Section 106 (2) (a)(iii) of the Finance Act, 2013
106 (2)(a)(iii)? provides for rejection of declaration if such
Whether a communication declaration is made by a person against whom
from department seeking an inquiry or investigation in respect of service
general information from the tax not levied or not paid or short-levied or short
declarant would lead to paid, has been initiated by way of requiring
invoking of section 106 (2) production of accounts, documents or other
(a)(iii) for rejection of evidence under the chapter or the rules made
declaration under the said thereunder, and such inquiry or investigation is
section? 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 2037
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