Vces overview & faq 2013 - ca bimal jain

Service Tax Voluntary Compliance Scheme, 2013 (VCES) – Overview & FAQ

Bimal JainFCA, FCS, LLB, B.Com (Hons)

Co-Chairman of IDT of PHD Chamber of CommerceMember of IDT of FICCI/ AssochamSpecial Invitee of IDT of ICAI/ ICSI

Member of Indirect Tax faculties of ICAI/ICSI/ICWAI

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013 (VCES) – CHAPTER VI

CA Bimal Jain www.simpletaxindia.net2

Launched Registered Assessee: 17 Lakhs – ST Return Filed: 7 Lakhs SSI (Rs.9-10 Lakhs) / Surrender STC

Eligible Person: -• Non Filers/ Stop Filers

• No Notice or an Order U/S 72 (Best Judgment) or U/S 73 (Taxes not levied/ not paid or short levied/ short paid or erroneously refunded) or U/S 73A (ST collected to be deposited with CG) has been issued or made before the 1-3-2013



Ineligible Person:-

• Filed Truthful Return but not deposited ST• Inquiry or investigation initiated by way of —(i) Search of premises U/S 82 of Finance Act, 1994(ii) Issuance of summons U/S 14 of CE Act, 1944 (iii)requiring production of accounts, documents or other

evidence or• Audit has been initiated,

Such inquiry, investigation or audit is pending as on 1-3-2013



Period for Declaration: From October 1, 2007 to December 31, 2012 on or before 31-12-2013

Pay at least half of that dues before December 31, 2013; remaining half to be paid by:

(a)June 30, 2014 without interest; or(b)By December 31, 2014 with interest from July 1, 2014

onwards; Pay Normal liability from January, 2013 as normally being

paid under the present law

No Refund of payment made under VCES



Immunity from Interest/ Penalty/ Other Proceedings

Consequences of not paying declared Amount: To be recovered as Arrear of land revenue by attaching movable and immovable properties

Consequences of not making True declaration: Where Commissioner of Central Excise has reasons to believe that the declaration was substantially false, serve notice to show cause why he should not pay the tax dues not paid or short-paid.

No action shall be taken after the expiry of one year from the date of declaration.



Form of Declaration of Tax dues in Form VCES -1 Form of Acknowledgment of Declaration by the

designated authority in Form VCES -2, within a period of seven working days from the date of receipt of the declaration

Form of Discharge Certificate by the designated authority in Form VCES – 3 upon payment of Tax dues declared

Any person, if not already registered, take registration Rule 4 of STR

CENVAT Credit cannot be utilized for payment of service tax under this scheme;



Cenvat credit on Inputs/ Input Services for declaration of Tax dues under VCES

Cenvat credit available for tax dues paid under reverse charge provided it is Input Service

Rejection under the VCES is appealable on principles of natural justice

Any amount paid in excess under VCES scheme be adjusted against the future Service tax liability



Section – 104 Short title Section – 105 Definitions Section – 106 Person who may make declaration of tax dues Section – 107 Procedure for making declaration and payment of

tax dues Section – 108 Immunity from penalty, interest and other proce

proceeding Section – 109 No refund of amount paid under the Scheme Section – 110 Tax dues declared but not paid Section – 111 Failure to make true declaration Section – 112 Removal of doubts Section – 113 Power to remove difficulties Section – 114 Power to make rules

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013 (VCES) – Rules


Rule 1 Short title and commencement Rule 2 Definitions. Rule 3 Registration. Rule 4 Form of declaration Rule 5 Form of acknowledgment of declaration. Rule 6 Payment of tax dues. Rule 7 Form of acknowledgement of discharge

FORM Declaration under sub section (1) of section 107 of the Finance Act, 2013

FORM VCES-1: Declaration u/s 107(1) FORM VCES-2: Acknowledgment of declaration issued u/s

107(2) FORM VCES-3: Acknowledgement of Discharge issued u/s

107(7)

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013 (VCES) - OBSERVATIONS


Biased to Honest Assessee – All India Federation of Tax Practitioner & Anothers Vs. UOI – [1998 (2) SCC 161]

No Secrecy clause as to confidentiality of information

Declared tax dues subject to approval by designated authority – Neutral & fair

For More details – Guide to For More details – Guide to SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013 (VCES)


CA Bimal Jain

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Delhi – 110091 India Desktel:+91-11-22757595

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Vces overview & faq 2013 - ca bimal jain