Budget 2013: Govt proposes compliance scheme for service tax defaulters

A defaulter may avail of the scheme on the condition that he files a truthful declaration of service tax dues since October 1, 2007 and makes the payment in one or two instalments before the prescribed dates.

"In such a case, interest, penalty and other consequences will be waived. I hope to entice a large number of assessees to return to the tax fold. I also hope to collect a reasonable sum of money," Finance Minister P Chidambaram said while presenting Union Budget for 2013-14 in Parliament.

Highlighting that only 7,00,000 out of the nearly 17,00,000 registered service tax assessees were filing returns, Chidambaram said: "We cannot go after each of them. I

have to motivate them to file returns and pay the tax dues."

Besides, there would be no change in the normal rate of service tax levied presently at 12 per cent, he said.

Emphasising on the importance of a stable tax regime, Chidambaram added only two more services into the negative list including vocational courses offered by institutes

affiliated to the State Council of Vocational Training and testing activities in relation to agriculture and agricultural produce.

However, the Finance Minister brought all air conditioned restaurants, including those that do not serve liquor which were till now exempt, under the ambit of service tax.

He also reduced rate of abatement for homes and flats with

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