Service tax - vces

This query is : Resolved

NIKIT SHETH (Querist)
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30 October 2013 Dear All,
Our client has filed service tax return for the period April 2011 till now. The error which occurred at that time was whole credit was wrongly utilized against the tax payable. Company is trading company also providing services. Thus cenvat on input services used for both trading and output services was utilized. Can the company file apply for VCES, since wrong utilization of cenvat is accepted for filing VCES. Also what will be the liability. i.e. will it be restricted to the amount of cenvat credit wrongly utilised at that time.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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31 October 2013 The two conditions for application under VCES is that some duty is due and payable to the Government and no Show Cause Notice, Audit observation, SIV/Intelligence proceedings have been initiated against the assessee.

Since wrong availment of CENVAT credit will result in reversal and payment of the duty wrongly availed there is liabiliy to pay Duty, if the secondcondition is satisfied, application under VCES can be made and the CENVAT credit reversed can be paid as taxes due. NO INTEREST OR PENALTY UNDER VCES SCHEME.

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