Finance Ministry to take action against service tax defaulters

Finance Ministry has invited service tax from all citizens who haven't paid their dues since 2007, and has warned that stern action will be taken against tax evaders after the payment scheme finishes on January 1 .

Advertising it as the final call to 'come clean', the Customs and Federal Excise department started a 'Voluntary Compliance Encouragement Scheme' (VCES) for service tax defaulters.

While addressing a news conference on Monday, Revenue Secretary, Sumit Bose, said that after the last due date of the scheme on December 31, service tax evaders would be subject to arrest and prosecution.

"After the last date, that is from 1st of January, 2014, stern action will be taken against service tax evaders and the provision of the finance act related to arrest and prosecution will be enforced in right earnest," said Bose.

As per reports, out of 1.7 million registered service tax assesses, only 700,000 file their returns on a regular basis.

Bose said that there has been an overwhelming response to the scheme and they had received submissions from 40,000 applicants.

"(The) Tax dues we have got till now is over 5500 crores (55 billion) and of this, 1500 crores (15 billion) in the last four days. This basically shows that there is a rush of applicants and hence the special measures have been taken by us," he added.

Bose also said that there would be no extension of the amnesty scheme and this was the last.

The declarants will have to pay half of the arrears till the last date of the scheme and the balance till prescribed dates next year in June without interest.