Several assessees from the city on Wednesday pleaded for broadening the ambit of Service Tax Voluntary Compliance Encouragement Scheme (VCES).

At a workshop conducted jointly by the Visakhapatam Chamber of Commerce and Industry (VCCI) and the CII, senior officials of Customs, Central Excise, and Sales Tax were told to include those assessees who had received notices for short-payment of tax.

Some of the participants questioned the levying of penal interest of 18 per cent on delayed payment of service and income-tax while the government was offering just 6 per cent on advance or surplus tax remitted by them.

“Let there be a provision for adjusting the excess/refund due to us. For instance if we have paid income tax in excess under tax deduction at source, let it be adjusted against service tax or central taxes we are supposed to pay,” said Rushikonda IT Association vice-president O. Naresh Kumar.

Stating that high rate of taxation was killing the IT industry, he said the fact that out of 17 lakh registered assessees under service tax law, only seven lakh were filing their returns exposed some serious lacunae in the taxation system.

Former Vizag chapter chairman of Builders’ Association of India P. Vishnu Kumar Raju welcomed VCES for those who ignorantly or deliberately had not paid service tax and wanted the scheme extended to those who had received notices for part/short payment.

The scheme is offered for the period October 1, 2007 to December 31, 2012 for those who have not been served notices, with the promise of immunity from interest, penalty and prosecution under the law. The last date for paying 50 per cent of tax is December 31.

Mr. Raju said for defence contracts they had been exempted from payment of service tax. However, the department was issuing notices to them at the time of settlement of bills from the defence authorities. He said the issue should be sorted out by the senior officials at the highest level.

Chief Commissioner of Customs and Central Excise Deepa B. Dasgupta said they would look into the genuine grievances of the assessees and promised to hold periodical meetings with the members of the trade and commerce.

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