Service tax amnesty scheme garners Rs5,500 cr

The service tax amnesty scheme, which ends at midnight tonight, has yielded Rs5,500 crore to the exchequer as on 29 December; and on Monday, the union government made a final appeal to defaulters to take advantage of the scheme or face penal action.

The Voluntary Compliance Encouragement Scheme (VCES) was launched on 10 May this year, allowing service tax defaulters to pay their dues without penalty or late payment charges.

"Up to December 29, 2013 we have received over 40,000 declarations involving over Rs5,500 crore," finance secretary Sumit Bose told reporters in New Delhi on Monday. In the last four days alone, the government has received over 16,000 applications involving Rs1,500 crore of service tax dues, he said.

"I would like to advise that from 1 January 2014, stern action will be taken against service tax evaders and the provisions in the Finance Act relating to arrest and prosecution will be enforced in right earnest," Bose said. He further said that tax offices would remain open till midnight today, while the designated branches of banks have been asked to accept collections till 6 pm.

"All Commissionerates have been advised to accept demand drafts/pay orders submitted by declarants, under the Receipt Payment Rules," Bose said. As per the scheme, a defaulter may declare his 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 the end of today. The scheme was introduced by finance minister P Chidambaram while presenting the Union Budget for 2013-14.

The government expects 36 per cent growth in service tax collection target this fiscal at Rs1.80 lakh crore.