Voluntary compliance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 August 2013 From the date of registration we have paid service tax amounts on billing but have not paid interest for late payment of service tax. Also we have not filed Service Tax Returns (ST 3). Can we take advantage of Voluntary Compliance Scheme.

What should we fill in the column Details of tax dues in Form VCES-1since we have paid all the tax amount ?

Querist : Anonymous

Querist : Anonymous (Querist)

26 August 2013 service tax

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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03 August 2025 Here’s what you need to know about **Voluntary Compliance in Service Tax (VCES) and related interest and returns**:

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### 1. **Can you take advantage of Voluntary Compliance Encouragement Scheme (VCES)?**

* **Yes, you can opt for VCES** to regularize your past service tax liabilities including unpaid interest and penalties.

* Even if you have **paid the principal service tax amount but have not paid interest or filed returns**, VCES allows you to disclose these dues voluntarily and get relief from interest and penalties.

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### 2. **What to mention in the “Details of Tax Dues” column in Form VCES-1 if you have paid the tax but not interest?**

* In the **Details of Tax Dues**, you should declare **all outstanding dues including interest and penalties** that are due as on the date of filing the VCES declaration, even if the principal tax has been paid.

* This means **interest amount payable for late payment and any penalties if applicable** should be declared.

* The scheme requires full disclosure of all unpaid dues.

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### 3. **Additional Points:**

* Filing of **Service Tax Returns (ST-3)** for the period during which tax is unpaid is required to be regularized.

* On payment under VCES, you get **waiver of interest and penalty** on disclosed dues but need to pay full tax dues (which you already paid) plus any other disclosed amounts.

* After VCES closure, no further demand can be raised on the disclosed dues.

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### Summary Table:

| Situation | What to do under VCES |
| ----------------------------- | ----------------------------------------- |
| Tax paid, interest unpaid | Declare unpaid interest in Form VCES-1 |
| Service Tax Returns not filed | File pending returns along with VCES |
| Full disclosure needed | Include all dues (tax, interest, penalty) |

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