SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT RULES, 2013 – FAQ

NOTIFICATION NO. 10/2013-ST, DATED 13-5-2013

In exercise of the powers conferred by sub-sections (1) and (2) of section 114 of the Finance Act, 2013 (17 of 2013), the Central Government hereby makes the following rules regarding the form and manner of declaration, form and manner of acknowledgement of declaration, manner of payment of tax dues and form and manner of issuing acknowledgement of discharge of tax dues under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, namely:-

Short title and commencement

1. (1) These rules may be called the Service Tax Voluntary Compliance Encouragement Rules, 2013.

(2) They shall come into force on the date of its publication in the Gazette of India.

Definitions

2. (1) In these rules, unless the context otherwise requires, –

(a)		“Act” means the Finance Act, 2013;
(b)		“Form” means the Forms annexed to these rules.
(c)		“Scheme” means the Service Tax Voluntary Compliance Encouragement Scheme, 2013 as specified in the Act;

(2) Words and expressions used but not defined in these rules but defined in the Scheme shall have the meanings respectively assigned to them in the Scheme.

Registration

3. Any person, who wishes to make a declaration under the Scheme, shall, if not already registered, take registration under rule 4 of the Service Tax Rules, 1994.

Form of declaration

4. The declaration under sub-section (1) of section 107 of the Act, in respect of tax dues under the Scheme shall be made in Form VCES -1.

Form of acknowledgment of declaration

5. The designated authority on receipt of declaration shall issue an acknowledgement thereof, in Form VCES -2, within a period of seven working days from the date of receipt of the declaration.

Payment of tax dues

6. (1) The tax dues payable under the Scheme along with interest, if any, under section 107 of the Act shall be paid to the credit of the Central Government in the manner prescribed for the payment of service tax under the Service Tax Rules, 1994.

(2) The CENVAT credit shall not be utilised for payment of tax dues under the Scheme.

Form of acknowledgement of discharge

7. (1) The designated authority shall issue an acknowledgement of discharge under sub-section (7) of section 107 of the, Act, in Form VCES-3.

(2) The acknowledgement of discharge shall be issued within a period of seven working days from the date of furnishing of details of payment of tax dues in full along with interest, if any, by the declarant.

FORM VCES – 1

[In duplicate]

Declaration under sub-section (1) of section 107 of the Act.

[See rule 4]

(Please read the instructions carefully before filling the form)

1.	Name of the declarant
2.	Address of the declarant
3.	Telephone No.
4.	E-mail id
5.	Service Tax Code (STC No.)
6.	Details of tax dues*
	A	Service tax	Rs.
	B	Education cess	Rs.
	C	Secondary & Higher Education cess	Rs.
	D	Amount under section 73A of the Finance Act, 1994	Rs.
	E	Total Tax dues* [A+B+C+D]	Rs.

*Furnish a calculation sheet separately [for the purposes of calculation of tax dues, the manner of calculation as prescribed in S. No. 3F (I), or as the case may be, the Part ‘B’ of Form ST-3, as existed during relevant period may be used and calculation of tax dues may be furnished tax return period wise and service wise if the tax dues relates to more than one services.]

VERIFICATION

I……….. (name in block letters) son/daughter of Shri ……….. solemnly declare that I have read and understood the Service Tax Voluntary Compliance Encouragement Scheme as contained in Chapter VI of the Finance Act 2013, and to the best of my knowledge and belief –

(a)		the information given in this declaration and the enclosures accompanying it are correct and complete and the amount of tax dues and other particulars shown therein are truly stated;
(b)		the tax dues declared above do not attract the provisions of sub-section (1), including the provisos thereto, of section 106 of the Act;
(c)		no inquiry, investigation or audit is pending against the declarant as on the 1st day of March, 2013 as envisaged in sub-section (2) of section 106 of the Act;

I further declare that I am authorised to make this declaration and verify it on behalf of the declarant in the capacity as………….

Enclosures:

S. No. 1 2		Details of enclosure/statement annexed Calculation sheet in respect of tax dues (refer S. No. 6 above and the instructions) Any other documents (please specify)
				Signature of the declarant/authorised person with stamp
					Place:	Date:
Declaration No.						Date
			(To be assigned by the department)

Instructions:

1.		The Scheme has been prescribed in the Chapter VI of the Act. The provisions contained therein may please be read carefully (refer www.cbec. gov.in).
2.		This Form shall be submitted to the Central Excise Officer notified as designated authority under section 105(c) of the Act.
3.		The tax dues may be computed separately for each service if the tax dues relates to more than one service during the period of declaration.
4.		For calculation of tax dues, the manner as prescribed at S. No. 3F (I), or as the case may be the Part ‘B’ of the Form ST-3, as existed during the relevant period, may be used and calculation of tax dues may be furnished tax return period wise
5.		Calculation sheet showing the tax dues calculation may please be enclosed with this declaration.
6.		Obtain an acknowledgment from the designated authority in form VCES -2.
7.		The declarant may approach the designated authority for any clarification.

FORM VCES-2

[Acknowledgment of decaration issued under sub-section (2) of section 107 of the Act].

[See rule 5]

						No.
Receipt of a declaration filed under sub-section (1) of section 107 of the Act, as per the details below, is acknowledged.
1	Declaration No.					Date
2	Name of the declarant
3	Address of the declarant
4	STC No.
5	Tax dues declared			Rs.
6	Schedule for payment of tax dues
	A	Minimum amount to be paid on or before the 31st Dec, 2013 (50% of the tax dues)		Rs.
	B	Remaining tax dues to be paid on or before the 30th June, 2014 [Amount at S. No. 5(-)Amount at S. No. 6A]		Rs.
	C	Any tax dues remaining unpaid as on 1st day of July,2014 shall be paid before the 31st December, 2014 along with interest, as prescribed under section 75 or as the case may be, section 73B of the Finance Act, 1994 for the period of delay starting from the 1st day of July, 2014.
	Signature, name and seal of designated authority
			Place:		Date:

Instructions:

1.		This acknowledgment has been issued on the basis of declaration furnished by the declarant and it does not certify the correctness of the declaration made. This declaration does not certify payment of any tax dues.
2.		Certificate of discharge in form VCES -3 shall be issued only upon full payment of tax dues along with interest if any, as per the details at S. No. 6 above.
3.		If any amount declared as tax dues under the Scheme remain unpaid as on 1.1.2015, the same shall be recoverable under section 87 of the Finance Act, 1994.
4.		For any clarification, the declarant may get in touch with the designated authority

FORM VCES-3

ACKNOWLEDGEMENT OF DISCHARGE

[Issued under sub-section (7) of section 107 of the Act]

[See rule 7]

No

This acknowledgment of discharge has been issued under sub-section (7) of section 107 of the Act, to ACKNOWLEDGE that the tax dues declared under sub-section (1) of section 107 of the Act have been paid, in respect of declaration so made as per the following details.

1		Declaration No.			Date
2.		Name of the declarant
3		Address of the declarant
4		STC No.
5		Tax dues declared under the Scheme Rs.
6		Payment of tax dues
A		Tax dues paid on or before 31.12.2013
B		Tax dues paid after 31.12.2013 but on or before 30.6.2014 Rs.
C		Tax dues paid after 30.6.2014 but on or before 31.12.2014 Rs.
D		Interest paid under section 107 (4) on amount mentioned at ‘6C Rs.
E		Total amount paid (A+B+C+D) Rs.
7		Details of challan(s)
		Challan No(s)(CIN)			Amount
	Signature, name and seal of designated authority
			Place:			Date:

â– â– 

 

FAQ on this Scheme

 

SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME – CBEC CLARIFIES CERTAIN ISSUES – MERE PENDENCY OF LETTER SEEKING GENERAL INFORMATION NOT AN IMPEDIMENT TO PERSON SEEKING THIS SCHEME

CIRCULAR NO. 169/4/2013-ST [F.NO.B1/19/2013-TRU], DATED 13-5-2013

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.

 

Issue – Whether a person who has not obtained service tax registration so far can make a declaration under VCES?

Clarification –  Any person who has tax dues to declare can make a declaration in terms of the provisions of VCES. If such person does not already have a service tax registration he will be required to take registration before making such declaration.

 

Issue –Whether a declarant shall get immunity from payment of late fee/penalty for having not taken registration earlier or not filed the return or for delay in filing of return.

Clarification – Yes. It has been provided in VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made thereunder.

 

 

 

Issue – Whether an assessee to whom show-cause notice or order of determination has been issued can file declaration in respect of tax dues which are not covered by such SCN or order of determination?

Clarification – In terms of section 106 (1) of the Finance Act, 2013 and second proviso thereto, the tax dues in respect of which any show cause notice or order of determination under section 72, section 73 or section 73A has been issued or which pertains to the same issue for the subsequent period are 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.

 

Issue – What is the scope of section 106(2)(a)(iii)? Whether a communication from department seeking general information from the declarant would lead to invoking of section 106 (2) (a)(iii) for rejection of declaration under the said section?

Clarification –Section 106(2)(a)(iii) of the Finance Act, 2013 provides for rejection of declaration if such declaration is made by a person against whom an inquiry or investigation in respect of service tax not levied or not paid or short-levied or short paid, has been initiated by way of requiring production of accounts, documents or other evidence under the chapter or the rules made thereunder, and such inquiry or investigation is 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.