Rate of interest on delay payment of Service Tax under Section 75 of the Finance Act, 1994

[Sudhir Kumar]

What was the rate of interest under section 75 of the Finance Act, 1994 on delay payment of Service Tax for the period 2002-03 to 20027-08? Please share the notification or circular issued in this ragard. As the department has proposed demand of interest on delay payment of Service Tax @ 24% for the period 2002-03 to 2004-05 while from the website I find that the rate of interest was just@15% only.

[KASTURI SETHI]

Rate of interest remained in force as per details given below :

Section 75 of the Finance Act, 1994

(i) Up to 15.07.2001 1.5 % per month (18%) or part thereof as per Section 75

(ii) 16.07.2001 to 15.08.2002 24% per annum Finance Act, 2001Clause 137

(iii) 16.08.2002 to 09.9.2004 15% per annum Finance Act, 2002Clause 149

(iv) 10.9.2004 to 31.03.2011 13% per annum Notification No. 26/2004-ST dated 10.9.2004

For Section 73B

See Notification 8/2006-ST dated 19.04.2006 and 15/11-ST dated 1.3.11 (effective from 1.4.11)

[Sudhir Kumar]

Thanks Sir,

AI Summary

Interest rate on delayed service tax payments was set by successive statutory amendments and a notification determining applicable rates. Interest on delayed payment of service tax was set by successive Finance Act amendments and by a government notification, producing distinct applicable rates for successive historical periods; interest for any delay must be calculated by reference to the statutory or notified rate in force on the relevant dates, and related liabilities are governed by separate notifications with their own effective dates.