Service Tax paid after 1st March, 2013 but before enactment of VCES is covered under VCES
As you know, Central Government has issued VCES, 2013 so as to provide immunity from payment of interest and penalty in respect of service tax due (pertaining to the period October, 2007 to December, 2012) as on 1st March, 2013. This scheme provides for declaration of tax due on or before 31st December, 2013. In addition applicant was also required to pay at least 50% of tax due declared under scheme on or before 31st December, 2012.
ow the moot question arises, whether amount paid by applicant from 1st March, 2013 till the date of enactment of scheme i.e. 10th May, 2013 will be covered under VCES? Department vide Circular No. 170/5/2013-ST dated 8th August 2013 has answered this question in negative way. According to the department taxes paid during 1st March, 2013 to 10th May, 2013 is not covered under scheme. Though this circular is far away from the intent of law, relying upon this circular department has started rejecting applications filed by applicants.
Aggrieved by these type of orders, applicants across the country has filed appeal/writ applications before competent authorities/judiciaries. Recently, while allowing writ petition filed by applicant, Honorable Gujarat High Court in case of SADGURU CONSTRUCTION CO Vs UNION OF INDIA 2014-TIOL-630-HC-AHM-ST (copy of judgment attached for reference) held that ‘the period between 1st March, 2013 and 10th May, 2013 would, by necessary application of the provision of the scheme, be covered for declaration under the scheme itself’.