EXTRACT OF THE FINANCE ACT, 2013
Act No.17 of 2013
(Assented by President of India on 10th May, 2013)
An Act to give effect to the financial proposals of the Central Government for the financial year 2013-2014.
BE it enacted by Parliament in the Sixty-fourth Year of the Republic of India as follows:-
CHAPTER I
PRELIMINARY
1. Short title and commencement.
(1) This Act may be called the Finance Act, 2013.
(2) Save as otherwise provided in this Act, sections 2 to 53 shall be deemed to have come into force on the 1st day of April, 2013.
CHAPTER V
SERVICE TAX
103. In the Finance Act, 1994,- .
Amendment of Act 32 of 1994.
(A) in section 65B,-
(i) in clause (11),-
(a) in sub-clause (i), after the words "National Council for Vocational Training" the words "or State Council for Vocational Training" shall be inserted;
(b) in sub-clause (ii), the word "or" occurring at the end shall be omitted;
(c) sub-clause (iii) shall be omitted;
(ii) in clause (40), after the words and figures "the Central Excise Act, 1944 (1 of 1944)" the words, figures and brackets "or the Medicinal and Toilet Preparations (Excise Duties) Act,1955 (16 of 1955)" shall be inserted;
(B) in section 66B, the Explanation shall be omitted;
(C) after section 66B, the following section shall be inserted, namely:-
"66BA Reference to section 66 to be construed as reference to section 66B.
(1) For the purpose of levy and collection of service tax, any reference to section 66 in the Finance Act, 1994 (32 of 1994) or any other Act for the time being in force, shall be construed as reference to section 66B thereof.
(2) The provisions of this section shall be deemed to have come into force on the 1st day of July, 2012."
(D) in section 66D, in clause (d), in sub-clause (i), the word "seed" shall be omitted;
(E) in section 73, after sub-section (2), the following sub-section shall be inserted, namely:-
"(2A) Where any appellate authority or tribunal or court concludes that the notice issued under the proviso to sub-section (1) is not sustainable for the reason that the charge of,-
(a) fraud; or
(b) collusion; or
(c) wilful misstatement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax,
has not been established against the person chargeable with the service tax, to whom the notice was issued, the Central Excise Officer shall determine the service tax payable by such person for the period of eighteen months, as if the notice was issued for the offences for which limitation of eighteen months applies under sub-section (1)."
(F) in section 77, in sub-section (1), for clause (a), the following clause shall be substituted, namely:-
"(a) who is liable to pay service tax or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to a penalty which may extend to ten thousand rupees;"
(G) after section 78, the following section shall be inserted, namely:-
"78A Penalty for offences by director, etc., of company.
Where a company has committed any of the following contraventions, namely:-
(a) evasion of service tax; or
(b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable service in violation of the rules made under the provisions of this Chapter; or
(c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or
(d) failure to pay any amount collected as service tax to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due, then any director, manager, secretary or other officer of such company, who at the time of such contravention was in charge of, and was responsible to, the company for the conduct of business of such company and was knowingly concerned with such contravention, shall be liable to a penalty which may extend to one lakh rupees."
(H) in section 83, for the figure and letter "9A" the words, brackets, figures and letter "subsection (2) of section 9A" shall be substituted;
(I) in section 86, in sub-section (5), for the word, brackets and figure "sub-section (3)" the words, brackets and figures "sub-section (1) or sub-section (3)" shall be substituted;
(J) in section 89,-
(a) in sub-section (1), for clauses (i) and (ii), the following clauses shall be substituted, namely:-
"(i) in the case of an offence specified in clauses (a), (b) or (c) where the amount exceeds fifty lakh rupees, with imprisonment for a term which may extend to three years:
Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for a term of less than six months;
(ii) in the case of the offence specified in clause (d), where the amount exceeds fifty lakh rupees, with imprisonment for a term which may extend to seven years:
(iii) in the case of any other offences, with imprisonment for a term, which may extend to one year.";
(b) for sub-section (2), the following sub-section shall be substituted, namely:-
"(2) If any person is convicted of an offence punishable under-
(a) clause (i) or clause (iii), then, he shall be punished for the second and for every subsequent offence with imprisonment for a term which may extend to three years;
(b) clause (ii), then, he shall be punished for the second and for every subsequent offence with imprisonment for a term which may extend to seven years.";
(K) after section 89, the following sections shall be inserted, namely:-
"90. Cognizance of offences
(1) An offence under clause (ii) of sub-section (1) of section 89 shall be cognizable.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974.), all offences, except the offences specified in sub-section (1), shall be non-cognizable and bailable.
91. Power to arrest.
(1) If the Commissioner of Central Excise has reason to believe that any person has committed an offence specified in clause (i) or clause (ii) of sub-section (1) of section 89, he may, by general or special order, authorise any officer of Central Excise, not below the rank of Superintendent of Central Excise, to arrest such person.
(2) Where a person is arrested for any cognizable offence, every officer authorised to arrest a person shall, inform such person of the grounds of arrest and produce him before a magistrate within twenty-four hours.
(3) In the case of a non-cognizable and bailable offence, the Assistant Commissioner, or the Deputy Commissioner, as the case may be, shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer in charge of a police station has, and is subject to, under section 436 of the Code of Criminal Procedure, 1973(2 of 1974.).
(4) All arrests under this section shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974.) relating to arrests.";
(L) in section 95, after sub-section (1-I), the following sub-section shall be inserted, namely:-
"(1J) If any difficulty arises in giving effect to section 93 of the Finance Act, 2013, in so far as it relates to amendments made by the Finance Act, 2013 in Chapter V of the Finance Act, 1994 (32 of 1994), the Central Government may, by an order published in the Official Gazette, not inconsistent with the provisions of this Chapter, remove the difficulty:
Provided that no such order shall be made after the expiry of a period of one year from the date on which the Finance Bill, 2013 receives the assent of the President.";
(M) after section 98, the following section shall be inserted, namely:-
"99 Special provision for taxable services provided by Indian Railways.
(1) Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July, 2012, or in section 66B, no service tax shall be levied or collected in respect of taxable services provided by the Indian Railways during the period prior to the 1st day of October, 2012.
(2) No refund shall be made of service tax paid in respect of taxable services provided by the Indian Railways during the said period prior to the 1st day of October, 2012.".
CHAPTER VI
Service tax voluntary compliance encouragement scheme, 2013
104. Short Title
This Scheme may be called the Service Tax Voluntary Compliance Encouragement Scheme, 2013.
105. Definitions
(1) In this Scheme, unless the context otherwise requires,-
(a) "Chapter" means Chapter V of the Finance Act, 1994 (32 of 1994);
(b) "declarant" means any person who makes a declaration under sub-section (1) of section 97;
(c) "designated authority" means an officer not below the rank of Assistant Commissioner of Central Excise as notified by the Commissioner of Central Excise for the purposes of this Scheme;
(d) "prescribed" means prescribed by rules made under this Scheme;
(e) "tax dues" means the service tax due or payable under the Chapter or any other amount due or payable under section 73A thereof, for the period beginning from the 1st day of October, 2007 and ending on the 31st day of December, 2012 including a cess leviable thereon under any other Act for the time being in force, but not paid as on the 1st day of March, 2013.
(2) Words and expressions used herein and not defined but defined in the Chapter or the rules made thereunder shall have the meanings respectively assigned to them in the Chapter or the rules made thereunder.
106. Person who make declaration of tax due
(1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st day of March, 2013:
Provided that any person who has furnished return under section 70 of the Chapter and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the said return:
Provided further that where a notice or an order of determination has been issued to a person in respect of any period on any issue, no declaration shall be made of his tax dues on the same issue for any subsequent period.
(2) Where a declaration has been made by a person against whom,-
(a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of -
(/) search of premises under section 82 of the Chapter; or
(//) issuance of summons under section 14 of the Central Excise Act, 1944 (1 of 1944), as made applicable to the Chapter under section 83 thereof; or
(///) requiring production of accounts, documents or other evidence under the Chapter or the rules made thereunder; or
(b) an audit has been initiated,
and such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration.
107. Procedure of making declaration and payment tax dues
(1) Subject to the provisions of this Scheme, a person may make a declaration to the designated authority on or before the 31st day of December, 2013 in such form and in such manner as may be prescribed.
(2) The designated authority shall acknowledge the declaration in such form and in such manner as may be prescribed.
(3) The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent. of the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority.
(4) The tax dues or part thereof remaining to be paid after the payment made under sub-section (3) shall be paid by the declarant on or before the 30th day of June, 2014:
Provided that where the declarant fails to pay said tax dues or part thereof on or before the said date, he shall pay the same on or before the 31st day of December, 2014 along with interest thereon, at such rate as is fixed under section 75 or, as the case may be, section 73B of the Chapter for the period of delay starting from the 1st day of July, 2014.
(5) Notwithstanding anything contained in sub-section (3) and sub-section (4), any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for delay in payment thereof, shall also be payable under the Chapter.
(6) The declarant shall furnish to the designated authority details of payment made from time to time under this Scheme along with a copy of acknowledgement issued to him under sub-section (2).
(7) On furnishing the details of full payment of declared tax dues and the interest, if any, payable under the proviso to sub-section (4) the designated authority shall issue an acknowledgement of discharge of such dues to the declarant in such form and in such manner as may be prescribed.
108. Immunity from penalty, interest and other proceeding.
(1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declared by him under sub-section (1) of section 97 and the interest payable under the proviso to sub-section (4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapter.
(2) Subject to the provisions of section 101, a declaration made under sub-section (1) of section 97 shall become conclusive upon issuance of acknowledgement of discharge under sub-section (7) of section 97 and no matter shall be reopened thereafter in any proceedings under the Chapter before any authority or court relating to the period covered by such declaration.
109. No refund of amount paid under the scheme
Any amount paid in pursuance of a declaration made under sub-section (1) of section 97 shall not be refundable under any circumstances.
110. Tax dues declared but not paid
Where the declarant fails to pay the tax dues, either fully or in part, as declared by him, such dues alongwith interest thereon shall be recovered under the provisions of section 87 of the Chapter.
111. Failure to make return declaration
(1) Where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme was substantially false, he may, for reasons to be recorded in writing, serve notice on the declarant in respect of such declaration requiring him to show cause why he should not pay the tax dues not paid or short-paid.
(2) No action shall be taken under sub-section (1) after the expiry of one year from the date of declaration.
(3) The show cause notice issued under sub-section (1) shall be deemed to have been issued under section 73, or as the case may be, under section 73A of the Chapter and the provisions of the Chapter shall accordingly apply.
112. Removal of doubts
For the removal of doubts, it is hereby declared that nothing contained in this Scheme shall be construed as conferring any benefit, concession or immunity on the declarant other than the benefit, concession or immunity granted under section 98.
113. Power to remove difficulties
(1) If any difficulty arises in giving effect to the provisions of this Scheme, the Central Government may, by order, not inconsistent with the provisions of this Scheme, remove the difficulty:
Provided that no such order shall be made after the expiry of a period of two years from the date on which the provisions of this Scheme come into force.
(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.
114. Power to make Rules
(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Scheme.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the form and the manner in which a declaration may be made under sub-section (1) of section 97;
(b) the form and the manner of acknowledging the declaration under sub-section (2) of section 97;
(c) the form and the manner of issuing the acknowledgement of discharge of tax dues under sub-section (7) of section 97;
(d) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules.
(3) The Central Government shall cause every rule made under this Scheme to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.