Interest on late payment of service tax

[Asked by Guest]

Hi

Service Tax was supposed to be paid by May 2009

However we went to Supreme Court against Service Tax Dept.

In Supreme it was decided the amount shall be paid 01/03/2012.
Ruling Says - However in the event of default on the part of the Applicants in deposit by the due date, it will be open to the service tax department to recover the entire amount in arrears forthwith.

The amount was deposited on 15 march 2012 ( 15 days later)

Now the interest will calculated on 15 days or from May 2009 (984 Days) by the Service tax department ?

[Mahir S]

Sir,

The ruling of the Court has nothing to do with the payment of interest..

In your case, the Interest is required to be paid from May 2009 onwards.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri S. Mahir.

[Ganeshan Kalyani]

Service tax if paid after it become due, the interest provison becomes applicable. The interest in your case need to be paid from the date when it became due I.e. May 2009.

AI Summary

Interest on late payment: interest runs from original due date regardless of later judicial payment directions or delayed deposit.
Interest on late payment of service tax is payable from the date the tax became due; a subsequent judicial direction fixing a later payment date does not stop interest accruing for the intervening period, so interest is computed from the original due date when payment was first payable.