There is a constant problem faced by the declarant that despite of the deposit of full tax dues as per the Declaration made by him and furnishing of the details of payment to the department, the department is not issuing VCES 3 on the pretext of certain queries and clarification sought from the assessee relating to his declaration.

The matter has been dealt in the Rule 7 (2) of the Service Tax Voluntary Compliance Encouragement Rules, 2013:-

"The acknowledgement of discharge shall be issued within a period of seven working days from the date of furnishing of details of payment of tax dues in full along with interest, if any, by the declarant."

The plain reading (literal construction) of the aforesaid rules makes it clear that once the declaration has passed the acid test of Section 106 (2) i.e. it is not liable for rejection within the meaning of section 106(2) - the same is supposed to be accepted. And if the assessee has paid the entire Tax Dues (with interest, if any), the department is under an obligation to issue Form VCES 3 within seven working from the date of intimation by the assessee.

The department cannot withhold the VCES-3 on any pretext or for want of information beyond 7 days of intimation of the full payment of tax by the assessee.

However, the department has an option to review the declaration under section 111 (1) - subject to documentation of "reasons for belief" by the commissioner that the declaration made by the declarant is substantial false.

The author is a Partner of M/s. Ritul Patwa & Co, Chartered Accountants, Jaipur and can be contacted at or e-mail at

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