I have been closely associated as a professional consultant with the Service Tax Voluntary Compliance Encouragement Scheme (VCES), 2013, since the enactment of the scheme by the government. Few of the early declaration in Jaipur under VCES, 2013 have been filled from our office. As a witness to the implementation of the scheme and on the basis of our interaction with the department, assesses, trade associations and business community, I am sharing below my experience of the Scheme.

Initially as the scheme was new and there was lack of clarity in respect of the implementation of the scheme, we faced several challenges in the filling of declaration and thereafter processing of the declaration filled in the department. In order to find a solution to various hurdles faced by us under the scheme, we made a representation to Sh. Rohan Choudhary, Asst Commissioner, Service Tax Division, Jaipur (Designated Authority – VCES, 2013) in the first week of Oct, 2013. It was a matter of great encouragement for us, that Sh. Rohan Choudhary not only discussed our problems in detail but also sought our opinion for effective and hassle free implementation of the scheme. Within a week time, on 18-10-2013 he managed to organise a conference headed by the Commissioner of Central Excise – Dr. Sandeep Shrivastava, where we had the opportunity to meet him in person, along with our fellow professionals and industry representatives to discuss the problems faced in the implementation of the VCES, 2013.

Three major problems were raised by us during the meeting viz. (1) To make the scheme Self Declaratory and not to outreach for detail scrutiny in each & every case by issuing notices; (2) To reduce the documents sought at the time of filling of the declaration and (3) To provide facility for clarification of doubts and problems of the assesses. It came as a surprise for most of us, that the commissioner immediately took cognisance of our problem and issued necessary instructions for resolution of the same without any delay.

In the same meeting, individual queries of various trade associations were resolved by Sh. R. K. Mishra (Addl Commissioner), with acute precession and to the satisfaction of the representatives of the industry.

After this meeting, a lot of vibrance was felt within the industry representatives and their fear and apprehensions about the scheme were reduced.

In order to make this scheme successful and bring awareness about service tax in the industry, Sh. Rohan Choudhary, Designated Authority – VCES, 2013 in Jaipur, further agreed to address the members of different trade association in the industry specific conferences. I had the opportunity to jointly address one such meeting by Hotel Association of Jaipur on 19-11-2013 at hotel Indiana Pride, Jaipur. The meeting was an astounding success with over 150 hoteliers of Jaipur attending the meeting and praising the extra-mile efforts done by the Service Tax Department. It was for the first time that such drastic efforts were made by the department to bring awareness about the Service Tax Laws and to make the Service Tax department easy approachable by the industry.

Thereafter, at every point and for every problem, we have found that the service tax department had greeted the declarants, industry and CA fraternity with open hands and was standing to resolve every problem faced by the assessee in filling his declaration.

I would like to mention one specific event which showed the proactive approach taken by the officials of Service Tax Department in the implementation of the scheme:– On 23rd of December, 2013, I called Sh. Rohan Choudhary Ji to request that in the routine course it takes about 3 days time to get Registration Certificate (ST 2) after filling ST 1 and since the number of days left in the scheme are very less it is creating a panic amongst the new declarants. He not only took note of our problem but despite of being out of station, same day managed to form a help desk for immediate issuance of Registration Certificate (ST 2) for new assesses who wants to file declaration under VCES, 2013.

This phenomenon was not only limited to the higher officials but could be seen down to the grass root level. Here, I would also like to mention the efforts of Mr. Shree Ram Meena (Suprintendent) who had been at the front end of verifying and dealing with the VCES declarations received. He has been very supportive all along and interacting with such officials give a lot of confidence to a new assessee dealing with the department for the first time.

How to improve compliance, widen the tax base and increase penetration of the Service Tax Laws?

As experienced by us, most of the businessmen would like to comply with the law but they lack proper information/ knowledge of the law and are afraid of the legal complications and departmental hassle in the compliance of law.

In our view and as per our experience of the implementation of the VCES, 2013 in Jaipur – a continuous and focused effort has to be done by the Service Tax Department to educate the assessee, build their confidence & trust in the department and encourage voluntary compliance of the law. The most effective method of this could be a joint effort by the Department and CA fraternity to reach out to different trade associations. This has already been experimented during the implementation of the VCES, 2013 and has shown wonderful response from the industry. Chartered Accountants can act as a catalyst between the department and the industry for building an environment of mutual trust and confidence.

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