Law will catch up with service tax defaulters, warns Chidambaram

Hyderabad – Warning service tax evaders that the law would ultimately catch up with them, union Finance Minister P. Chida! mbaram Wednesday asked the defaulters to avail the Voluntary Compliance Encouragement Scheme (VCES) ending Dec 31, saying it is “once in a life-time” opportunity.

Addressing businesspersons, taxpayers and tax professionals at an interactive session on VCES here, he said while 17 lakh people voluntarily registered under service tax, only seven lakh had actually paid the tax.

“The remaining have either never paid service tax or stopped paying it. How long can you be a no-filer or stop-filer? You may get away for a week, a month, a year or may get away for couple of years but ultimately law will reach you,” he said.

Chidambaram said the department deliberately adopted a benign model and did not invoke harsh provisions of the excise law.

“Today we want to give an opportunity to you to come clean. I can’t think of a more fair or generous opportunity. Such a scheme will not come for another 20 years,” he said.

The finance minister said those! who have service tax liabilities between October 2007 and December 201! 2, should pay their dues now to avoid any interest or penalty. They have to pay at least 50 percent of their dues by Dec 31 and can pay the rest by June 2014.

He said 15 service tax defaulters were arrested so far as they had failed to pay Rs.50 lakh or more to the government even after collecting it from consumers.

He advised the department to accept all declarations under VCES, saying rejection must be a rare case. He pointed out that out of 9,000 declarations received so far, only 107 were rejected and even they would be scrutinized by a committee of officials.

Union Minister of State for Finance J. D. Seelam and senior officials participated in the interactive session.