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How to benefit from service tax amnesty
Wed, 03 Jul 2013 00:45:00 0530
Today, almost all services fall within the ambit of service tax, except for a few that feature in the negative list. When the negative list concept was introduced last year, 17 broad categories of services - such as public transport, health and education were included in it. Later, a master circular was issued in June 2012, which exempted 39 services from the ambit of service tax. Budget proposals introduce changes to the negative list and updates are available on CBEC's website. Currently, the service tax exemption limit is Rs 10 lakh and the current rate is 12%.

As a first step, if you are providing any services to another person for consideration (other than as a salaried employee), it is advisable to look up the negative list to see whether you fall within the service tax net ( notifications/notfns-2012/st25-2012.htm). If you do and have defaulted, you could benefit from the Voluntary Compliance Encouragement Scheme, popularly referred to as the Service Tax Amnesty Scheme 2013. The Central Board of Excise & Customs (CBEC) on May 13, 2013 issued a notification providing clarifications about the amnesty scheme. Read on to learn more...
Ihaven't registered under the Service Tax Act. Can I still opt for amnesty scheme?

Yes, after registering, a taxpayer with pending service tax dues can make a declaration under the amnesty scheme. Details of registration are available at
Reg_FAQ.jsp. If you have registered, but haven't filed your return or not made correct disclosures in your service tax return, you can still opt for the amnesty scheme.
What are the salient features of the amnesty scheme?

The service tax dues in respect of which the amnesty is available pertain to the period from October 1, 2007 up to December 31, 2012. The defaulting taxpayer has to pay 50% of the dues by December 31, 2013 and the remaining by June 30, 2014. In case the June 2014 deadline is missed, the tax dues should be paid by December 31, 2014 together with interest for the period of delay, computed from July 1, 2014.

Service tax dues under the Amnesty Scheme will be computed at the rates applicable at the time when these taxes were originally due and not the rates prevailing on the date of making the amnesty declaration or actual deposit of tax under the scheme. Actual payment of service tax dues has to be made. The notification clarifies that un-used CENVAT credit cannot be used to set off the tax payable under the amnesty scheme.
What are the benefits available under the amnesty scheme?

The amnesty scheme offers immunity from penalty, interest and any other proceeding under the service tax laws provided the declaration of unpaid service tax dues made under the scheme is truthful. If the service tax authorities believe that the voluntary declaration of tax dues is not accurate, they have the power to scrutinize the books.

Who is not eligible to opt for the amnesty scheme?

Service tax dues in respect of which: (i) any showcause notice or order of determination under section 72, 73 or 73A of the Finance Act, 2013, has been issued as of March 1, 2013, or (ii) any audit, investigation or audit has been initiated by way of search, issuance of summons or requiring production of information; and such an audit, investigation into the same is pending are not covered under the scheme.

However,the recent circular clarifies that any other unpaid service tax dues could be declared by the same taxpayer under the amnesty scheme.

Once I opt for the amnesty scheme, what is the process to be followed?

You are required to make a disclosure of the tax dues correctly in Form VCES-1. Within seven days of receipt of this form, the service tax authorities shall issue an acknowledgement in Form VCES-2. Once payments have been made, as per the dates outlined earlier, the service tax authorities shall issue a discharge acknowledgement in Form VCES-3.

(Times of India)
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