Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Service tax amnesty scheme collections rise to Rs 3,761 crore

Dec 26 2013, 01:12 IST
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P Chidambaram had called it a rare opportunity to make a fresh start for tax evaders (Reuters) P Chidambaram had called it a rare opportunity to make a fresh start for tax evaders (Reuters)
Summary9,000 applications for amnesty was received by service tax department till December 5

Bringing some solace to the revenue department, which is staring at the highest ever shortfall in tax receipts of some Rs 70,000 crore this fiscal, the service tax amnesty scheme, after an initial hiccup, has begun to yield significant revenue.

Collections under the amnesty scheme, announced in the last Budget, had remained a trickle until a month ago but has since surged to total R3,761 crore, according to finance ministry sources. In the last five to six days, the department has collected R957.4 crore under the scheme, in what hopefully signals an acceleration.

While 9,000 applications for amnesty was received by the service tax department till December 5, 6,821 applications were received in the last six days, sources said. The government’s aggressive campaign through advertisements in the print and electronic media has contributed to the sudden increase in the number of people seeking amnesty.

Under the amnesty scheme, the revenue department expects to collect taxes without interest and penalty mainly from restaurateurs, rent-a-cab service providers and those offering services to the construction, infrastructure and mineral exploration industries under work contracts.

Government sources said these are businesses where non-payment to the exchequer of the tax collected from service recipients is most rampant. Supply of manpower is another service where non-payment of tax is found.

Service tax is payable at 12.36% on all services, except a few on a negative list publicised by the government.

The amnesty scheme, which is called Voluntary Compliance Encouragement Scheme, was introduced from May 10, 2013, as a one-time opportunity to pay service tax dues for the period from October 1, 2007, to December 31, 2012.

Finance minister P Chidambaram had called it a rare opportunity to make a fresh start for tax evaders.

As such a window would not be opened again for the next 20 years, tax evaders could face prosecution then. He cited that the last time such a scheme was floated was in 1997. The deadline to file declarations of default and pay half of the amount due is December 31. The government was targeting 10 lakh registered service providers who had defaulted and had piled up service tax arrears.

To coax evaders to avail of the amnesty scheme, the government also made non-payment to the exchequer of the service tax collected above Rs 50 lakh a cognizable and non-bailable offence. What makes the offence serious is the fact that tax has been collected on

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