P Chidambaram's voluntary disclosure of income scheme (VDIS) of 1997 may have been a great success but in 2013, it seems the government needs to push hard a similar amnesty scheme for service tax payers. With a tardy response to the scheme so far, the top brass like the revenue secretary and even finance minister have entered the ring.
They have been personally holding meetings in different cities asking businessmen to take advantage of voluntary compliance encouragement scheme (VCES) 2013 for service tax announced in the union budget. This is the second such meeting in the city after one being held by the chief commissioner of customs and central excise last month.
VCES has been operational since two months and so far 1000 applications have been accepted throughout the country. In the Nagpur range that covers Nashik and Aurangabad apart from Vidarbha region 150 applications have come. There are over 28,000 service tax assessees in this range. On Tuesday the union revenue secretary Sumit Bose addressed representatives from different business associations of the city. He also took suggestions from them apart from talking about the scheme. Bose has held meetings in other cities too.
It is not the revenue secretary alone who had called on the traders, even the finance minster P Chidambaram held a meeting at Kolkata, said a senior official accompanying the revenue secretary. Another such event is planned in Nashik with a member of Central Board of Excise and Customs (CBEC), addressing the businessmen. CBEC is the governing body of service tax department.
Bose was originally supposed to attend a function at National Academy of Direct Taxes (NADT) but he preferred to address traders on the VCES issue instead. Businessmen and tax practioners, on the other hand, say that they do not find the scheme attractive. Ashok Chandak, former president of Institute of Chartered Accountants of India (ICAI), said the businessmen want a blanket amnesty scheme. However, VCES does not cover such cases in which the department has already taken action or a litigation is underway. This is a major reason making them wary of VCES.
Businessmen also apprehend that once they put up an application under the scheme it may attract trouble in future as it may provide taxmen a base to act against them, said a source. "We lack confidence in the bureaucracy," said another trade representative present in the meeting with Bose.
Later, at the sidelines of the meeting, Bose told TOI so far no target had been fixed for the scheme but the government hoped to bring maximum number of assessees under the VCES. The scheme ends on December 31. He also stressed that once the period ended the department would crack down hard on the defaulters.
A source in the department said though no sector could be pinpointed as such, large defaults have been seen in the construction industry after the sale of flats and other units was covered under service tax. This is also because in many cases the buyers themselves do not want to shell out the levy.
Source:- timesofindia.indiatimes.com
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