TaxTMI 
TaxTMI 
Respected All,
A service provider collect late payment charges from his customers, is he liable to pay service tax on such late payment charges?
Regards,
Sanjeev
Service Tax liability on Late payment charges
10 Oct 2013 
3 Replies 
1899 Views Asked by
Interest on delayed payment excluded from service value; accounting treatment can determine whether service tax applies.
Under the Service Tax (Determination of Value) Rules, 2006, interest on delayed payment for provision of services is excluded from the value of taxable service; however, if late payment charges are recorded as miscellaneous receipts rather than as interest, they may be treated as part of taxable consideration and attract service tax. (AI Summary)
Under the Service Tax (Determination of Value) Rules, 2006, interest on delayed payment for provision of services is excluded from the value of taxable service; however, if late payment charges are recorded as miscellaneous receipts rather than as interest, they may be treated as part of taxable consideration and attract service tax. (AI Summary)