The Voluntary Compliance Encouragement Scheme (VCES) is an amnesty scheme launched by the finance minister for the people who have stopped doing service tax returns and those who have never filed. This scheme provides the benefits like waiver of fine and interest to tax dues to defaulters. The service tax defaulters those who have not taken the benefit of the one time VCES are likely to be arrested from January 1. The finance ministry has given green signals to the Hyderabad zone service tax department to launch strict actions including immediate recovery of money by attaching property or bank accounts and arrest.
Meanwhile the service tax department is giving wide publicity to the VCES scheme and will continue till December 31. The department even formed mobile teams to reach different corners of the Hyderabad in the next two weeks to persuade the defaulters to pay the tax.
To persuade the defaulters to file returns, a wing of service tax department, Central Board of Excise and Customs has established the teams. A senior official said that, in the recent past the department forced to arrest some tax defaulters in security agencies, multimedia companies and construction. Because they collected service tax from customers but did not deposit with the department.