Union Finance Minister P Chidambaram on Thursday unveiled the Service Tax Voluntary Compliance Encouragement Scheme (VCES) and asked tax defaulters to take advantage of the opportunity and come clean or face penalty by December this year and the rest by June 2014.

The VCES aims at promoting self-declaration of tax dues by giving them a rare opportunity to pay half of their tax dues without any interest or penalties.

Unveiling the scheme, Mr. Chidambaram said, "This is an opportunity to come clean. We think it is an opportune moment to give a once-in-a-life-time opportunity to defaulters to come clean."

He also underlined that the government's Service Tax Act contains provision for imposing monetary penalty and punishment on tax defaulters. He said that those who have collected more than Rs 50 lakh in service tax and not deposited it with the government would face punishment of jail-term of up to 7 years.

The finance minister also expressed hope that the VCES would encourage a great number of tax defaulters to declare their tax dues.

The government aims to collect Rs 1.8 lakh crore in service tax during the current financial year, up from Rs 1.3 lakh crore during the last financial year.