{"id":2970,"date":"2013-11-26T10:57:24","date_gmt":"2013-11-26T05:27:24","guid":{"rendered":"http:\/\/www.itatonline.org\/info\/?p=2970"},"modified":"2013-11-26T11:18:04","modified_gmt":"2013-11-26T05:48:04","slug":"cbec-vces-clarification-circular-no-17492013","status":"publish","type":"post","link":"https:\/\/itatonline.org\/info\/cbec-vces-clarification-circular-no-17492013\/","title":{"rendered":"CBEC VCES Clarification Circular No.174\/9\/2013"},"content":{"rendered":"<p>In connection with the Service Tax Voluntary Compliance Encouragement Scheme (VCES), the CBEC has issued Circular No.174\/9\/2013 \u2013 ST dated 25.11.2013 clarifying several issues that were raised in interactive sessions with the trade which have not been specifically clarified hitherto or clarified adequately. <\/p>\n<div class=\"journal2\">\n<p><img decoding=\"async\" src=\"https:\/\/itatonline.org\/info\/wp-content\/plugins\/wp-downloadmanager\/images\/ext\/pdf.gif\" alt=\"\" title=\"\" style=\"vertical-align: middle;\" \/>&nbsp;&nbsp;<strong><a href=\"https:\/\/itatonline.org\/info\/download\/CBEC_VCES_Circular_174.pdf\">CBEC VCES Calrification Circular No.174\/9\/2013<\/a><\/strong> (19.3 KiB, 4,096 hits)<\/p>\n<\/div>\n<div class=\"amazonright\"> <iframe src=\"https:\/\/ws-in.amazon-adsystem.com\/widgets\/q?t=tax00-21&#038;o=31&#038;p=8&#038;l=as1&#038;asins=B00EVPYU1U&#038;ref=tf_til&#038;fc1=000000&#038;IS2=1&#038;lt1=_blank&#038;m=amazon&#038;lc1=0000FF&#038;bc1=000000&#038;bg1=FFFFFF&#038;f=ifr&#038;MarketPlace=IN&#038;ServiceVersion=20070822&#038;WS=1&#038;ID=8042_ProductLink&#038;Operation=GetProductLink&#038;\" style=\"width:120px;height:240px;\" scrolling=\"no\" marginwidth=\"0\" marginheight=\"0\" frameborder=\"0\"><\/iframe>\n<\/div>\n<p align=\"right\"><strong><u>Circular No.174\/9\/2013 &ndash;  ST<\/u><\/strong> <\/p>\n<p align=\"center\">F.No.B1\/19\/2013-TRU <br \/>\n  Government of India <br \/>\n  Ministry of Finance <br \/>\n  Department of Revenue <br \/>\n  Central Board of Excise  &amp; Customs <br \/>\n  (Tax Research Unit) <br \/>\n  North  Block <br \/>\n  New Delhi, 25th&nbsp;November,   2013 <\/p>\n<p>To, <br \/>\n  Chief  Commissioners of Central Excise and Customs (All), <br \/>\n  Director  General (Service Tax), Director General (Central Excise  Intelligence),&nbsp;Director General (Audit), <br \/>\n  Commissioners  of Service Tax (All) <br \/>\n  Commissioners  of Central Excise (All), <br \/>\n  Commissioners of Central Excise and Customs (All). <\/p>\n<p>Madam\/Sir, <\/p>\n<p><strong>Sub:  The Service Tax Voluntary Compliance Encouragement Scheme &#8211; reg.<\/strong> <\/p>\n<p>The Service Tax Voluntary Compliance Encouragement Scheme  (VCES) has come into effect from 10.5.2013. Most of the issues raised with  reference to the Scheme have been clarified by the Board vide circular Nos.  169\/4\/2013-ST, dated 13.5.2013 and No. 170\/5\/2013-ST, dated 8.8.2013. These  clarifications have also been released in the form of FAQs.&nbsp;Attention is also invited to letter F.  No. 137\/50\/2013-ST, dated 22.8.2013 as regards the action to be taken by the  field formations for effective implementation of the Scheme. A number of  interactive sessions have also been held at various places to ascertain and  address the concerns of trade on any aspect of the Scheme. <\/p>\n<p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the recently held&nbsp;interactive sessions at Chennai, Delhi and Mumbai, which were  chaired by the Hon&rsquo;ble Finance Minister, the trade had raised certain queries  and also expressed some apprehensions. Most of these issues have already been  clarified in the aforementioned circulars\/FAQs. Certain issues raised in these  interactive sessions, which have not been specifically clarified hitherto or  clarified adequately, are discussed and clarified as below. <\/p>\n<div align=\"center\">\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"5\" width=\"100%\">\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>S.No.<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p align=\"center\">Issue raised<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p align=\"center\">Clarification<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>1<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p>An instance    was brought to notice wherein a declaration was returned probably on the    ground that it was incomplete.<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p>As has    already been directed by the Board, vide the said letter dated 22.8.2013 (para&nbsp;2.4 of    the letter), the designated authority shall ensure that no declaration is    returned.&nbsp;&nbsp;In all cases,    declaration should be promptly received and duly acknowledged. Request for    clarification should be dealt with promptly. Defects in the application, if    any, should be explained to the declarant and possible assistance be provided    in rectifying these defects. The effort must be to accept a declaration, as    far as possible, and recover the arrears of tax.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>2<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p>An apprehension was raised that    declarations are being considered for rejection under section 106 (2) of the    Finance Act, 2013, even though the &ldquo;tax dues&rdquo; pertain to an issue or a period    which is different from the issue or the period for which inquiry    \/investigation or audit was pending as on 1.3.2013.<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p>Section 106(2) prescribes four    conditions that would lead to rejection of declaration, namely,<br \/>\n        &nbsp;(a)&nbsp;an inquiry or investigation in    respect of a service tax not levied or not paid or short-levied or short-paid    has been initiated by way of,-<br \/>\n        (<em>i<\/em>) search of premises    under section 82 of the Finance Act,1994 ; or<br \/>\n        &nbsp;(<em>ii<\/em>) issuance of    summons under section 14 of the Central Excise Act, 1944; or<br \/>\n        &nbsp;(iii) requiring production    of accounts, documents or other evidence under the Finance Act, 1994 or the    rules made there under; or<br \/>\n        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<em>b<\/em>) an audit has been    initiated,<br \/>\n        and&nbsp;such inquiry, investigation or    audit was pending as on the 1st day of March, 2013.<br \/>\n        These conditions may be construed    strictly and narrowly. The concerned Commissioner may ensure that no    declaration is rejected on frivolous grounds or by taking a wider    interpretation of the conditions enumerated in section 106(2). If the issue    or the period of inquiry, investigation or audit is identifiable from summons    or any other document, the declaration in respect of such period or issue&nbsp;<u>alone<\/u>will be liable for    rejection under the said provision.<br \/>\n        Examples:<br \/>\n        (1) If an inquiry, investigation    or audit, pending as&nbsp;&nbsp;on    1.3.2013 was being carried out for the period from 2008-2011, benefit of VCES    would be eligible in respect of &lsquo;tax dues&rsquo; for the year 2012, i.e., period    not covered by the inquiry, investigation or audit.<br \/>\n        (2) If an inquiry or    investigation, pending as on 1.3.2013 was in respect of a specific issue, say    renting of immovable property, benefit of VCES would be eligible in respect    of &lsquo;tax dues&rsquo; concerning any other issue in respect of which no inquiry or    investigation was pending as on 1.3.2013.<br \/>\n        It is also reiterated that the    designated authority, if he has reasons to believe that the declaration is    covered by section 106(2), shall give a notice of intention to reject the    declaration within 30 days of the date of filing of the declaration stating    such reasons to reject the declaration. Commissioners should ensure that this    time line is followed scrupulously.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>3<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p>Whether benefit of VCES would be    available in cases where documents like balance sheet, profit and loss    account etc. are called for by department in the inquiries of roving nature,    while quoting authority of section 14 of the Central Excise Act in a routine    manner.<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p>The designated authority\/    Commissioner concerned may take a view&nbsp;<u>on    merit<\/u>, taking into account the facts and circumstances of each case as to    whether the inquiry is of roving nature or whether the provisions of section    106 (2) are attracted in such cases.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>4<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p>Whether the benefit of the Scheme    shall be admissible in respect of any amount covered under the definition of    &lsquo;taxes dues&rsquo;, as defined in the Scheme, if paid by an assesses after the date    of the Scheme coming into effect, (i.e., 10.5.2013), but before a declaration    is filed<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p>Yes, benefit of the Scheme would    be available if such amount is declared under the Scheme subsequently, along    with the remaining tax dues, if any, provided that Cenvat credit has not been    utilized for payment of such amount.<br \/>\n        Example:<br \/>\n        A person has tax dues of Rs 10    lakh. He makes a payment of Rs 2 lakh on 15.5.2013, without making a    declaration under VCES. He does not utilize Cenvat credit for paying this    amount. Subsequently, he makes declaration under VCES on 1.7.2013. He may    declare his tax dues as Rs 10 lakh. Rs 2 lakh paid before making the    declaration will be considered as payment under VCES.<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"63\" valign=\"top\">\n<p>5<\/p>\n<\/td>\n<td width=\"196\" valign=\"top\">\n<p>Whether declaration can be made in    such case where service tax pertaining to the period covered by the Scheme    along with interest has already been paid by the parties, before the Scheme    came into effect, so as to get waiver from penalty and other proceedings?<\/p>\n<\/td>\n<td width=\"336\" valign=\"top\">\n<p>As no &ldquo;tax dues&rdquo; is pending in    such case, declaration cannot be filed under VCES. However, there may be a    case for taking a lenient view on the issue of penalties under the provision    of the Finance Act, 1994. In this regard attention is invited to section 73    (3) and section 80 of the Finance Act, 1994.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n<\/div>\n<p>3.  Trade Notice\/Public Notice may be issued to the field formations and tax  payers. Please acknowledge receipt of this Circular. Hindi version follows. <\/p>\n<p align=\"right\">Yours sincerely, <\/p>\n<p align=\"right\">&nbsp;(S.&nbsp;Jayaprahasam) <br \/>\n  &nbsp;Technical Officer, TRU <br \/>\n  Tel: 011-2309 2037 <\/p>\n","protected":false},"excerpt":{"rendered":"<p>In connection with the Service Tax Voluntary Compliance Encouragement Scheme (VCES), the CBEC has issued a Circular No.174\/9\/2013 \u2013 ST dated 25.11.2013 clarifying several issues that were raised in interactive sessions with the trade which have not been specifically clarified hitherto or clarified adequately<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/info\/cbec-vces-clarification-circular-no-17492013\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1,7],"tags":[],"class_list":["post-2970","post","type-post","status-publish","format-standard","hentry","category-all-information","category-others"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts\/2970","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/comments?post=2970"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts\/2970\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/media?parent=2970"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/categories?post=2970"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/tags?post=2970"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}