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Indian Service Tax Amnesty Drawing To Close

by Mary Swire,, Hong Kong

30 December 2013

More than 40,000 individuals have so far applied to take part in the Indian Government's Voluntary Compliance Encouragement scheme.

The cases in question are together worth more than INR550bn (USD887.8m) to the Government in service tax revenues. In the four days to December 29, the Government received 16,000 declarations, involving INR15bn.

Under the VCES, the Government will waive any interest and penalties associated with the non-filing of service tax between October, 2007 and December, 2012, providing that at least 50 percent of the tax owed is paid on or before December 31, 2013. The remaining tax due must be paid on or before June 30, 2014. After that date, and up to December 31, 2014, the VCES will continue to operate, but interest will be payable on the outstanding amount.

The Finance Ministry is to keep tax offices open "well beyond" their normal working hours on the 30th, in the hope that this will encourage more people to file declarations. Offices will remain open until midnight on the 31st.

A number of banks will operate until 6pm on the 31st, and commissioners have been advised to accept demand drafts and pay orders submitted by participants in the scheme, under the Receipt Payment Rules.

Finance Minister P. Chidambaram has warned that from the new year, "stern action will be taken against service tax evaders and the provisions in the Finance Act relating to arrest and prosecution will be enforced in right earnest."

TAGS: individuals | compliance | Finance | tax | tax compliance | India | tax avoidance | tax incentives | interest | revenue guidance | banking | ministry of finance | tax authority | tax planning | revenue statistics | penalties | services | Compliance | Tax | Tax Evasion

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