service tax interest calculation

[Mohideen A]

As per Sec 75 of Finance act 1994 read with Notification no. 13/2016 - Dated 1-3-2016 w.e.f. 14.5.2016, interest at 15% p.a. is levied for other cases (i.e. service tax is not collected from the customers) for non - payment of service tax liability. For instance, there is an unpaid liability for a period exceeding 6 years, is there any max ceiling limit for the interest on such liability or simple interest @ 15% is calculated for the due period which is more than the ST liability.

Thanks in advance.

[KASTURI SETHI]

I want to know full facts of the case. Whether SCN invoking extended period has been issued ? If so, whether extended period has been invoked correctly ?

[KASTURI SETHI]

Interest can exceed tax. There is no such cap in Service Tax laws.

[DR.MARIAPPAN GOVINDARAJAN]

There is no other way except to pay the interest in full.

AI Summary

Interest on Unpaid Service Tax Liabilities Under Section 75: No Cap on Interest Beyond Six Years An individual inquired about the calculation of interest on unpaid service tax liabilities under Section 75 of the Finance Act 1994, specifically questioning if there is a maximum limit on interest for liabilities exceeding six years. Responses clarified that there is no cap on interest, which can exceed the tax amount itself, and that the full interest must be paid as per the existing service tax laws. Additional queries were raised about whether a show cause notice invoking an extended period had been issued and if it was done correctly.