Service tax amnesty scheme fetches govt around Rs7,700cr
17 Jan 2014
The Voluntary Compliance Encouragement Scheme (VCES), the service tax amnesty scheme launched on 10 May 2013, has yielded around Rs7,700 crore for the government, according to the finance ministry.
The scheme, which enabled service tax defaulters to pay dues without penalty or late payment charges, closed on 31 December 2013.
The bulk of the declarations were made by assessees engaged in construction and works contracts, followed by transportation and supply of manpower, sources said.
Service tax is levied at 12 per cent (plus 3 per cent surcharge) on all services except those which are in the negative list. The government estimates that only 7 lakh out of a total 17 lakh registered service tax payers are paying the tax.
Under the one-time amnesty scheme, a defaulter may declare his or her tax liabilities for the period between 1 October 2007 and 31 December 2012. They would have to pay 50 per cent of the declared tax dues by 31 December 2013.
The scheme was introduced by finance minister P Chidambaram while presenting the union budget for 2013-14. The finance minister had met industry bodies to encourage assessees to take advantage of the tax amnesty scheme to avoid punishment.
The government aims to collect a total of Rs1,80,000 crore by way of service tax in the current fiscal.
