Amnesty Scheme of Service Tax

Union Budget 2013-14 introduced an ‘amnesty scheme’ to encourage service tax defaulters to pay the outstanding taxes voluntarily. It allows those who have failed to pay service tax for the period October 1, 2007 to December 31, 2012, to voluntarily pay up. They can file a declaration with the authorities on or before December 31, 2013 together with evidence of payment.

The scheme was launched to enable the trade to clear service tax dues from October 2007 to December 2012. The scheme provides immunity from payment of interest.




Salient features of the amnesty scheme

  • The service tax dues in respect of which the amnesty is available pertain to the period October 1, 2007 up to December 31, 2012.
  • The defaulting tax payer 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.

Utilisation of CENVAT credit for making payment

  • Unused CENVAT credit cannot be used for the tax payment under the amnesty scheme.
  • Actual payment of service tax dues has to be made.

Benefits available under 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 scrutinise the books.

Process to be followed

  • 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.

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