Finance Ministry dangles lolipop for service tax defaulters: One-time amnesty scheme
20 May 2013 12:08 AM GMT
Aimed at widening revenue from indirect tax, the Finance Ministry has implemented one-time amnesty scheme for service tax defaulters to pay their due without any penalty or late payment charges.
The 'Voluntary Compliance Encouragement Scheme', which came into force after passage of Finance Bill on 10 May, can be availed by a service tax defaulter by this year end.
A defaulter may declare his due tax liabilities, including the cess charges, for a period between 1 October, 2007 and 31 December, 2012 and pay it to the government after making a truthful declaration and can avoid penalty, interest or any other penal proceedings.
The first-of-its-kind scheme was introduced by Finance Minister P Chidambaram while presenting budget for 2013-14.
Of the 17 lakh registered assesses under Service tax, only seven lakh were filing returns, Chidambaram had said.
'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. Hence, I propose to introduce a one-time scheme called 'Voluntary Compliance Encouragement Scheme',' the Finance Minister had said.
However, any person who has furnished return and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, will not be eligible to make declaration for the period covered by the said return, the Finance Bill says.
To further encourage voluntary compliance by defaulters, the Finance Ministry has also decided to 'reject' any enquiry or investigation against an evader, if he comes forward to make truthful declaration under this.
'A person may make a declaration to the designated authority on or before the 31st day of December, 2013,' it said.
All such declarant under the scheme have to pay not less than 50 per cent of the tax dues on or before 31 December, this year and the rest by 30 June, 2014.
As per the government estimates, service tax evaders have deprived the exchequer of over Rs 9,872 crore during April- December, 2012.
The 'Voluntary Compliance Encouragement Scheme', which came into force after passage of Finance Bill on 10 May, can be availed by a service tax defaulter by this year end.
A defaulter may declare his due tax liabilities, including the cess charges, for a period between 1 October, 2007 and 31 December, 2012 and pay it to the government after making a truthful declaration and can avoid penalty, interest or any other penal proceedings.
The first-of-its-kind scheme was introduced by Finance Minister P Chidambaram while presenting budget for 2013-14.
Of the 17 lakh registered assesses under Service tax, only seven lakh were filing returns, Chidambaram had said.
'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. Hence, I propose to introduce a one-time scheme called 'Voluntary Compliance Encouragement Scheme',' the Finance Minister had said.
However, any person who has furnished return and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, will not be eligible to make declaration for the period covered by the said return, the Finance Bill says.
To further encourage voluntary compliance by defaulters, the Finance Ministry has also decided to 'reject' any enquiry or investigation against an evader, if he comes forward to make truthful declaration under this.
'A person may make a declaration to the designated authority on or before the 31st day of December, 2013,' it said.
All such declarant under the scheme have to pay not less than 50 per cent of the tax dues on or before 31 December, this year and the rest by 30 June, 2014.
As per the government estimates, service tax evaders have deprived the exchequer of over Rs 9,872 crore during April- December, 2012.
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