Service tax voluntary compliance scheme

Dear Freinds,

One of my client during the year 2010-2011 has turover of Rs.1. 2 crores and he has charged service tax of Rs.14.83 lakhs and Claimed Rs.12 Lakhs service tax input credit and paid the remaining balance of Rs.2.83 lakhs to the Govt During 2011-12 and 2012-13 he has charged service tax and not yet paid the service tax amount to the Govt. I want to file VCES 1 and regularise his service tax returns.

My queries are as follows:

1. During the year 2010-11 he has got the registration done and he has paid the service tax due as mentioned above but he has not filed the service tax return. When i am filing VCES1 how do I show this service tax payments since there was no payment due for the year 2010-11?

2. Whether I should exclude 2010-2011 while filing VCES 1 and declare only the service tax payable for the year 2011-12 and 2012-13 which was actully due for payment ?

Please advise.

No you can't take benefit of non levy of penalty for FY10-11, since there was no tax dues during this period.

However you can claim VCES benefit for 11-12, 12-13, since there are tax dues for this period.

See this FAQ by CBEC

Q:A person has made part payment of his ‘tax dues’ on
any issue before the scheme was notified and makes
the declaration under VCES for the remaining part of
the tax dues. Will he be entitled to the benefit of nonpayment
of interest/penalty on the tax dues paid by him
outside the VCES, i.e., (amount paid prior to VCES)?

No. The immunity from interest and penalty is only for “tax
dues” declared under VCES.
If any “tax dues” have been paid prior to the enactment of
the scheme, any liability of interest or penalty thereon shall
be adjudicated as per the provisions of Chapter V of the
Finance Act, 1994 and paid accordingly.

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Srinivasa

Shivashish

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