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
30 Oct 2013 
2 Replies 
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Service tax interest rate change applies prospectively; interest on wrong CENVAT use accrues from the statutory due date.
Interest on wrongly availed and utilised service tax credit accrues from the statutory due date under Rule 6; corporate assessees follow the monthly payment deadline (with an electronic payment distinction) and individuals/proprietors/partnerships follow the quarterly deadline. An increase in the prescribed interest rate operates prospectively from its notified commencement date, with earlier periods charged at the prior rate. Reversing the credit now does not eliminate interest liability for the intervening period. (AI Summary)
Interest on wrongly availed and utilised service tax credit accrues from the statutory due date under Rule 6; corporate assessees follow the monthly payment deadline (with an electronic payment distinction) and individuals/proprietors/partnerships follow the quarterly deadline. An increase in the prescribed interest rate operates prospectively from its notified commencement date, with earlier periods charged at the prior rate. Reversing the credit now does not eliminate interest liability for the intervening period. (AI Summary)