TaxTMI 
TaxTMI 
TaxTMI 
Interest rate of service tax for wrong availment of cenvat credit has been increased from 13 percent to 18 percent from 01.04.2011. If Service tax credit is taken and utilised wrongly on 01.05.2010 and depositing through e-payment challan today instead of reversing cenvat. What rate of interest is to be adopted. whether Interest is required to paid from 01.05.2010 till the date of payment.
Service tax interest rate
RAJESH IYER
Interest Rate for Wrong CENVAT Credit Availment: 18% After April 1, 2011; Rule 6 Applies to Reversed Credits A query was raised regarding the applicable interest rate for the wrong availment of CENVAT credit on service tax, which increased from 13% to 18% effective April 1, 2011. The first response clarified that the 18% rate applies from April 1, 2011, onward, while the 13% rate applies before this date. Interest is charged from the due date under Rule 6 of the Service Tax Rules, 1994. The second response agreed and added that interest applies even if the credit is reversed instead of being deposited in cash. (AI Summary)