Service tax overdue? Tax men to work until midnight on 31 Dec for amnesty scheme

The voluntary service tax compliance scheme has received an overwhelming response, the government said on Monday, a day before the scheme ends, and urged service providers to make the most of the scheme.

Service tax forms a major chunk of the government’s revenue kitty, and also witnesses a lot of evasion. To ensure that more and more service providers pay the service tax, the finance ministry had announced an amnesty scheme a few months ago. Under the scheme, the ministry had said, those who declare and pay upto 50% of their service tax dues will not be prosecuted.

Since announcing the scheme, the ministry has received over 40,000 declarations involving Rs 5,500 crore until 29 December 2013. These pertain to taxation on services worth at least Rs 55,000 crore and would have otherwise escaped the tax net. The scheme’s popularity can be gauged from the fact that in the last four days alone, the finance ministry received 16,000 applications, involving Rs 1,500 crore service tax in dues.

The ministry has reminded service tax payers that tax offices will work beyond their regular working hours today and tomorrow i.e. on 30 December and 31 December 2013 to accept declarations. In fact, to ensure maximum declarations, tax officers will be working until midnight on 31 December 2013.

“From 1 January 2014, stern action will be taken against service tax evaders, and the provisions in the Finance Act related to arrest and prosecution will be enforced in earnest,” said revenue secretary Sumit Bose.