In a stern warning to service tax evaders, the government asked them to either pay their dues by tomorrow or face penal action which could include arrest and prosecution.
"I would like to advise that from January 1, 2014 stern action will be taken against service tax evaders and provisions in the Finance Act relating to arrest and prosecution will be enforced in right earnest," Revenue Secretary Sumit Bose told reporters in New Delhi.
The Voluntary Compliance Encouragement Scheme (VCES), which came into effect from May 10, allows a service tax defaulter to pay dues without any penalty or late payment charges.
Under the scheme, a person may make a declaration to the designated authority on or before December 31.
Over 40,000 applications, involving tax amount of about Rs 5,500 crore (Rs 55 billlion), have been filed till December 29, Bose said.
In the last four days, the revenue department has received 16,000 applications involving Rs 1,500 crore (Rs 15 billion) of service tax dues, as deadline for the first-of-its-kind amnesty scheme ends on Tuesday, the Revenue Secretary added.
He further said that on Monday our offices will be open well beyond normal working hours. On Tuesday, our offices will be open till midnight to facilitate acceptance of declaration.
Finance Minister P Chidambaram recently said that schemes like VCES are rare opportunities, which are unlikely to come again in the next 20 years. He had suggested tax evaders to take benefit of the amnesty scheme.
"Countdown has begun and the last date is December 31. Government has made a fair and generous offer, a one-time 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," Chidambaram had said.
A defaulter may declare his tax liabilities, including the cess charges, for the period between October 1, 2007 and December 31, 2012 and pay it to the government after making a truthful declaration to avoid penalty, interest or any other penal proceedings.
The scheme was introduced by Chidambaram while presenting the Union Budget for 2013-14.
Of the 17 lakh registered assesses under Service Tax, only seven lakh were filing returns, Chidambaram had said.
An evasion of service tax of Rs 50 lakh and above has now been made a cognisable offence after the passage of current fiscal Finance Bill on May 10.
The Finance Minister has proposed provisions of Criminal Procedure Code (CrPC) to arrest such offenders, in line with customs and central excise laws. Earlier, the officials did not have any power to arrest a person for service tax evasion.
The ministry has set an indirect tax collection target of Rs 5.65 lakh crore (Rs 5.65 trillion) for 2013-14, through customs, excise and service tax, up from Rs 4.73 lakh (Rs 4.73 trillion) crore collected in the last fiscal.