1. Service Tax Voluntary Compliance
Scheme, 2013 (VCES) – Overview & FAQ
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
Co-Chairman of IDT of PHD Chamber of Commerce
Member of IDT of FICCI/ Assocham
Special Invitee of IDT of ICAI/ ICSI
Member of Indirect Tax faculties of ICAI/ICSI/ICWAI

2. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net2
 Launched  Registered Assessee: 17 Lakhs – ST Return
Filed: 7 Lakhs  SSI (Rs.9-10 Lakhs) / Surrender STC
 Eligible Person: -
• Non Filers/ Stop Filers
• No Notice or an Order U/S 72 (Best Judgment) or U/S 73
(Taxes not levied/ not paid or short levied/ short paid or
erroneously refunded) or U/S 73A (ST collected to be
deposited with CG) has been issued or made before the 1-
3-2013

3. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net3
 Ineligible Person:-
• Filed Truthful Return but not deposited ST
• Inquiry or investigation initiated by way of —
(i) Search of premises U/S 82 of Finance Act, 1994
(ii) Issuance of summons U/S 14 of CE Act, 1944
(iii)requiring production of accounts, documents or other
evidence or
• Audit has been initiated,
 Such inquiry, investigation or audit is pending as on 1-3-
2013

4. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net4
 Period for Declaration: From October 1, 2007 to December
31, 2012 on or before 31-12-2013
 Pay at least half of that dues before December 31, 2013;
remaining half to be paid by:
(a)June 30, 2014 without interest; or
(b)By December 31, 2014 with interest from July 1, 2014
onwards;
 Pay Normal liability from January, 2013 as normally being
paid under the present law
 No Refund of payment made under VCES

5. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net5
 Immunity from Interest/ Penalty/ Other Proceedings
 Consequences of not paying declared Amount: To be
recovered as Arrear of land revenue by attaching
movable and immovable properties
 Consequences of not making True declaration: Where
Commissioner of Central Excise has reasons to believe that
the declaration was substantially false, serve notice to
show cause why he should not pay the tax dues not paid
or short-paid.
 No action shall be taken after the expiry of one year from
the date of declaration.

6. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net6
 Form of Declaration of Tax dues in Form VCES -1
 Form of Acknowledgment of Declaration by the
designated authority in Form VCES -2, within a period of
seven working days from the date of receipt of the
declaration
 Form of Discharge Certificate by the designated authority
in Form VCES – 3 upon payment of Tax dues declared
 Any person, if not already registered, take registration Rule
4 of STR
 CENVAT Credit cannot be utilized for payment of service
tax under this scheme;

7. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net7
 Cenvat credit on Inputs/ Input Services for declaration of
Tax dues under VCES
 Cenvat credit available for tax dues paid under reverse
charge provided it is Input Service
 Rejection under the VCES is appealable on principles of
natural justice
 Any amount paid in excess under VCES scheme be
adjusted against the future Service tax liability

8. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – CHAPTER VI
CA Bimal Jain www.simpletaxindia.net8
 Section – 104 Short title
 Section – 105 Definitions
 Section – 106 Person who may make declaration of tax dues
 Section – 107 Procedure for making declaration and payment of
tax dues
 Section – 108 Immunity from penalty, interest and other proce
proceeding
 Section – 109 No refund of amount paid under the Scheme
 Section – 110 Tax dues declared but not paid
 Section – 111 Failure to make true declaration
 Section – 112 Removal of doubts
 Section – 113 Power to remove difficulties
 Section – 114 Power to make rules

9. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) – Rules
CA Bimal Jain www.simpletaxindia.net9
 Rule 1 Short title and commencement
 Rule 2 Definitions.
 Rule 3 Registration.
 Rule 4 Form of declaration
 Rule 5 Form of acknowledgment of declaration.
 Rule 6 Payment of tax dues.
 Rule 7 Form of acknowledgement of discharge
 FORM Declaration under sub section (1) of section 107 of the
Finance Act, 2013
 FORM VCES-1: Declaration u/s 107(1)
 FORM VCES-2: Acknowledgment of declaration issued u/s 107(2)
 FORM VCES-3: Acknowledgement of Discharge issued u/s 107(7)

10. SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT
SCHEME, 2013 (VCES) - OBSERVATIONS
CA Bimal Jain www.simpletaxindia.net10
 Biased to Honest Assessee – All India Federation of Tax
Practitioner & Anothers Vs. UOI – [1998 (2) SCC 161]
 No Secrecy clause as to confidentiality of information
 Declared tax dues subject to approval by designated
authority – Neutral & fair

11. For More details – Guide toFor More details – Guide to SERVICE TAX VOLUNTARY
COMPLIANCE ENCOURAGEMENT SCHEME, 2013 (VCES)
CA Bimal Jain www.simpletaxindia.net11

12. CA Bimal Jain
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1st
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Delhi – 110091 India
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