Rate of interest on delay payments in service tax

[Guest]

what is the rate of interest on delay payments on service tax. what is the procedure if we have not yet file any return for this f'y. and also not deposited tax till date

[Brijesh Verma]

Dear Neeta, If you have not paid the Tax as yet then my sincere advice would be that you pay it as early as possible. you must deposit interest @ 13% P.A. along with the tax through TR-6 Challan in quadruplicate. you may later be called upon to pay a penalty of Rs. 1,000. however this is very rare. you must try hard to create some "Reasonable cause" for such a non payment so as to avoid penalty. But there is no way to escape interest. As far as non filing of ST-3 Return is concerned, the last date of filing the return for the first half year has expired on the 25th October. now you must quickly file the return. Earlier there was a compulsory penalty for non filing of the return, but now w.e.f. 10.09.2004 the provisions have been relaxed and now instead of the mandatory penalty there is a provision of discretionary penalty u/s 77. But still as i told earlier, be ready with a reasonable cause to defend your self/ your client. Feel Free to communicate. Regards Brijesh C Verma, Chartered Accountant 98296 66011 [email protected]

[Guest]

At present rate of Interest for delayed payment of Service Tax is 13% P.A. The return in ST-3 Form is required to be filed every half yearly and S.Tax is to be deposited every quarterly in case of Prop or Partnership firm and on monthly basis in case of Company. In case the tax have rightly/timely been paid and return can be filed now. In case assessee prove delay out of control or bonafide than no penalty imposable otherwise Rs.1000/- Penalty for delayed return. For further detail Finance Act be consulted. Thanks.

[rishi mohan]

Sir, 

Rate of interest for delay in service tax payment is 13%. Service tax is deposited vide challan TR-6. It is being deposited quarterly in case of proprietorship and partnership concern and in case of companies it need to be deposited on monthly basis. 

AI Summary

Interest on delayed service tax payments accrues at the statutory annual rate; tax must be deposited via prescribed challan. Interest on delayed service tax payments is chargeable at 13% P.A., payable with the outstanding tax through the TR-6 challan. Service tax deposits are quarterly for proprietorships/partnerships and monthly for companies; ST-3 returns are filed half yearly. Interest cannot be escaped, so tax and interest should be paid promptly. Since 10.09.2004 mandatory penalties were replaced by a discretionary penalty provision u/s 77; a reasonable cause may avert penalty.