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Limitations of Service Tax Amnesty Scheme

Introduction of the Voluntary Compliance Encouragement scheme has been welcomed by thousands of defaulters of duties, deliberate or, otherwise. The fact that the latter would be allowed to come into the open along with the complete amount of dues amassed by them over the years without any significant penalties whatsoever has managed to sprout the good-citizen bone in most evaders. When a certain defaulter takes shelter under this scheme, he / she will be relieved from penalties in the form of additional interests and fines levied in the due amount and other associated punishments that surround evasion. However, what people must understand is that, the limitations of this plan may take the better of them sooner than they think.

Also recognized widely as Service Tax Amnesty Scheme, this introduction has its share of limitations that can come in the way of certain evaders who are in the process of setting their records straight. To begin with, this scheme can be applicable only for duties that have been evaded during the time frame of 01.10.2007 to 31.12.2012. For duties that are due before the mentioned period or, after, this scheme will not be applicable in any way whatsoever and the normal procedures will be resumed with punishments and penalties intact. At the same time, the concerned applicants under this scheme must ensure making their declaration within 31.12.2013 after which they will not be able to take benefits under this provision.

Secondly, assesses on whom an enquiry has been called and the process of audit is either due or, in progress, will not be able to take benefits under the provisions. Thirdly, the aspect that keeps confusing many defaulters is the belief that the grant of amnesty would mean the ‘grant of pardon from paying the due amount’ in the first place. This is however, not the case. Under the provisions of this introduction, the concerned evader will be pardoned only from the penalties and nothing else. He / she will have to ensure paying the due amount in two installments in which, at least 50% of the amount will have to be paid in the first half of the financial year.

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News Release: Limitations of Service Tax Amnesty Scheme
Submitted on: September 17, 2013 10:22:30 AM
Submitted by: Vikash Dhanania
On behalf of: