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.

AI Summary

Dispute over Section 75 interest rates: department charged 24% beyond 15 Aug 2002 despite schedule reducing rate to 15% Under Section 75 of the Finance Act, 1994, the interest rates for delayed service tax were: up to 15.07.2001 - 1.5% per month (18% p.a.); 16.07.2001 to 15.08.2002 - 24% p.a.; 16.08.2002 to 09.09.2004 - 15% p.a.; and 10.09.2004 to 31.03.2011 - 13% p.a. Notifications subsequently governed computation and related provisions; separate notifications addressed Section 73B interest applicability and effective dates. The forum poster disputed a departmental demand charging 24% for 2002-03 to 2004-05, but the posted rate schedule shows 24% only until 15.08.2002, then 15% thereafter.