Audit Para - VCES

[Ramachandran and Ramachandran Associates Subramanian]

For the period ending 31st Decemebr, 2008 there was an Audit Para in respect of Reimbursement of Expenses for which Service Tax had not been paid.  The Audit Para was satisfied when the Assessee paid the ST with interest at the time of Audit itself.

For the period commencing from January, 2011 and ending on December, 2012, Service Tax was not paid in respect of Reimbursement of Expenses ( Cenvat credit claimed ). The assessee has declared it under VCES.  Whether the VCES declaration is liable to be rejected on any ground ?

[MANDAVILLI RAMAKRISHNA]

your declaration will not be rejected.

regards

rk

[Maruti Bhogulkar]

Dear Sir,

                As its the voluntary  made by the Assessee it is expected by the Service Tax  Department that you make a fair declaration of the turnover and service tax liability as per the ST-3 returns format applicable to that period. Once the declaration is made you will get the acknowledgement for same. The department may not call for a audit unless they find that there huge difference or some provisions not followed were St was applicable,etc. Also see that you can you can justify the declarations made.

Thank you.

AI Summary

Voluntary Compliance under VCES requires fair service tax return-based declarations; department may audit if discrepancies found.
A voluntary declaration under the Voluntary Compliance Encouragement Scheme should fairly state turnover and service tax liability consistent with applicable service tax returns; filing yields an acknowledgement. The tax authority may audit if substantial discrepancies or non compliance are apparent, and the declarant must be able to justify reconciliations, including claimed Cenvat on reimbursements.