P. Chidambaram warns service tax evaders, says 'start afresh'

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We started by introducing service tax and administering it in a benign way: P. Chidambaram (PTI) We started by introducing service tax and administering it in a benign way: P. Chidambaram (PTI)
SummaryP. Chidambaram sends clear warning to service tax evaders, offers opportunity for redemption.

Calling Service Tax Voluntary Compliance Encouragement Scheme (VCES) a rare opportunity to make a "fresh start", Finance Minister P. Chidambaram today asked those in trade and industry to seize the offer, even as he made it clear that tax evaders would eventually be "reached".

"Service tax countdown has begun and the last date is December 31. Government has made a fair and generous offer, a onetime offer that is not likely to come your way for at least a couple of decades. Therefore, it is in the best interest of everyone to take advantage of the offer," P. Chidambaram said.

"Just recall when the last amnesty scheme was announced. The last amnesty scheme was announced in 1997 called VDIS, it is now 16 years later that we have launched such a scheme for service tax," he said at a meeting here on VCES with representatives of trade, industries and their associates.

"If anyone feels another scheme will come next year, I'm afraid they have mistaken. These schemes cannot be announced every year. There should be a good reason why we have to do so," he said.

Explaining the reasons for announcing the service tax scheme, he said "We started by introducing service tax and administering it in a benign way, with paying dividends- 17 lakh service tax providers voluntarily registered as a service tax members..., but only 7 lakh actually paid service tax, the remaining 10 lakh did not pay service tax.

"We can classify them as no-filers or stop-filers. No-filers are those who have never filed service tax, stop-filers are those who have paid for a year or two....who later stopped filing service tax."

Stating that much has changed in the last 17-18 years, and today government has technology and huge amount of information about tax payers, he said, "If we are able to identify a tax evader and we want to look at what he is doing, believe me we have the information and the technology- which can provide 360 degree profile of that person."

".....eventually people will be identified, people will be reached. That is how we have been able to identify a number of people who are chronic tax evaders, and I'm sorry you must have read about in the paper, we had to arrest them."

"These are people who collected service tax- not a small amount, collected amount in excess of Rs 50 lakh- kept it with themselves without remitting it to

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