VCES Interest for delay

[satbir singhwahi]

VCES-2013 for Rental Income was filed, tax due was deposited on 30.06.2014. Now Audit party has detected that tax for period 01.07.2007 to 28.02.2009 was wrongly deposited @10% instead of 12%. Kindly guide the rate of interest and period for which the interest to be deposited.

[Mahir S]

Sir,

the query raised by the audit department is correct.

Service tax rate :

Sr. No.	Period	Rate of Service Tax	Rate of Education Cess	Rate of Secondary and Higher Secondary Education Cess
1.	1-6-2007 to 23-2-2009	12%	2% of S.T.	1% of S.T.

Further from 10.09.2004, the interest rate for late payment under service tax law is 13% and from 01.04.2011 onwards it is 18%.

AI Summary

Interest on late service tax payments applies at higher statutory rates depending on the payment date when tax was under-declared. Audit found a short deposit due to application of an incorrect historic service tax rate; the correct composition for that period includes service tax plus education cess and secondary and higher secondary education cess. Interest on delayed payment applies and must be calculated and paid using the statutory interest rates corresponding to the period during which the shortfall remained unpaid.