Vces 2013 - eligibility rules under defective return - Service Tax

We have a client who has filed 6 Service tax returns for 3 consecutive years (2008-09, 09-10, 10-11) quite late (in DEC 2011) due to some personal difficulties, although the service tax was deposited on time. All the returns were E-filed. No penalty was paid/deposited at that time. Also, the PE and SHED tax component were clubbed & paid jointly under single tax code of 298, instead of 298 & 426 separately.

The Suptt. now has been verifying the returns and asking for penalty for late filing of returns as also tax due under accounting code 426 (already paid under 298 erroneously). Is there a way out, under the present VCES scheme?

It is ironical that persons who havn't paid any tax or not filed any returns get benefitted thoroughly, whereas persons who have sincerely paid their taxes, albeit with some errors, stand to be penalsed heavily. Please provide best solutions.

ISHITA.

B.com.

Unfortunately these type of schemes are encouragement for dishonest. This scheme is also only for the offender.

Wherever the revenue already has the information on tax due, they do not provide any coverage under this scheme.

We need to understand that the bureaucrats who hold the country to ransom require to increase the collections at any cost. They are aided by unconcerned parliamentarians many of who are niether educated not honest.

Many honest tax payers are questioning thier foolishness inpaying taxes promptly. Now that it has come they feel it wouldbe repeated at intervals like the many schemes in Income tax and they can avoid payment in future.

Payment under errorneous head is not an offense. No need to pay. There is a recent tribunal judgment on this. However penalty could be levied.