India – Service Tax – Voluntary Compliance Encouragement Scheme
According to Data compiled from Finance Ministry, there are nearly 17,00,000 registered assessees under service tax,
only about 7,00,000 file returns. Many have simply stopped filing returns.
The Finance Minister cannot go after each of them. In order to motivate them to file returns and pay the tax dues, Finance Minister just a while ago introduced a one-time scheme called Voluntary Compliance Encouragement Scheme.
What Does Voluntary Compliance Encouragement Scheme for Service tax Evaders / Defaulters in India Offer ? A defaulter may avail of the scheme on condition that he files a truthful declaration of service tax dues since 1.10.2007 and makes the payment in one or two installments before prescribed dates. In such a case, interest, penalty and other consequences will be waived.
The finance minister is thinking that this will entice a large number of assesses to return to the tax fold and hope to collect a reasonable sum of money.