Calling Service Tax Voluntary Compliance Encouragement Scheme (VCES) a rare opportunity to make a "fresh start", Finance Minister P Chidambaram on Wednesday asked those in trade and industry to seize the offer, even as he made it clear that tax evaders would eventually be "reached".
"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," he 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 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 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 the government. How do you expect any government to show sympathy to such persons," Chidambaram said.
Pointing out that VCES is an opportunity for those who have not paid service tax, he said ".....we thought if 10 lakh people are no-filers or stop-filers and we have concrete example of chronic tax evaders- any government must give them one more opportunity to come clean and that is what Parliament has done."
He said Parliament had approved this scheme under which "we give you one more opportunity- one clear opportunity to come clean and make a fresh start. This will be your opportunity to make a fresh start."
Chidambaram, while asking tax evaders to make a fresh start, said ".....make the declaration, pay half the tax by December 31- the remaining half without interest by June 30 or with interest by next December 31."
"I think no government can be more generous, fairer. We are giving you an opportunity. I want you to seize this opportunity...."
Clarifying that all declarations will be accepted, he said "I know 107 declarations have been rejected..., but even there I have said we will appoint a screening committee after 31 December to look at the rejected application- to see that how it can be accepted."
"The root is declarations will be accepted... I'm here to collect money; I'm here to collect tax. As far as possible accept the declaration and collect the tax. We are not interested in punishing you and make life difficult for you. We are here to collect tax, we will collect it fairly- we want you to seize this opportunity and pay the service tax," he said.