To tide over the ongoing economic slowdown, Government of India is eyeing big money by chasing tax defaulters and non-filers of tax returns or those who do not need to file returns.
A special scheme for service tax voluntary compliance encouragement scheme (VCES) was announced in the budget targeting 12 lakh such service providers in the country. So far, the response to VCES has been extremely poor in Gujarat. Of the 23,125 who qualify for the scheme, only 18 have approached the department till date.
“The scheme was opened for service tax defaulters in May and we got three applications in the same month while 15 others applied in June. We have asked for clarifications in certain areas and that will encourage more people. We are also meeting trade and industry associations to promote the scheme,” said a top official of the central excise department.
First introduced in 1994, service tax has become a cash cow for the Centre as all services are included in the taxable list of services barring a negative list. Though the department hopes for a good response, the finance ministry is not leaving any stone unturned to make the scheme a success.
Sources in the Gujarat cadre confirmed that the Union finance minister and the minister of state for finance would be going to Ahmedabad to review the progress of the scheme. “On September 10, J Seelam, minister of state for finance, will be in Ahmedabad to meet leaders of industrial associations apart from field officers of the department,” the official added.
Service tax collections rose by 13 per cent to Rs1,109 crore in the first quarter of 2013-14 compared to Rs983 crore for the same period in 2012-13. Service tax collection for the last fiscal in the state was Rs4,692 crore, which was 40 per cent higher than the previous year.