Interest on delayed payment

[Joice Jacob]

Dear Experts,

First I thank you very much for those who had cleared my doubts and answered well. Now, I am liable to an amount of Rs. 25000/- as Service Tax, which is delayed for 9 days.

1) The interest to be paid for Rs. 25000/- is @ 13% ?
or 
2) Rs. 200/- per day or interest @2% per month, which ever is higher.

May I know, which is the present rule for interest on delayed payment of Service tax please ?

Joice Jacob.

[YAGAY andSUN]

Dear Sir,

In your query, you had mentioned penalty and interest both under section 75 and section 76.

Interest is now 18% p.a. w.e.f 01-04-2011 but for service providers upto Rs.60 lakhs of value of services rate of interest is 13%.

Penalty is not less that Rs. 200 for every day which such failure continues @ 1% per mlont on the service tax due (Starting from the first day after the due date till the date of actual payment) whichever is higher subject to such penalty [not exceeding the amount of service tax payable]

Best Regards,

 

Pradeep Khatri

 

[RAJESH MANGAL AGRAWAL]

Dear Mr Jacob,

From 08.04.2011 the interest U/S 75  will be levied @ 18% PA for late payment of tax (with an exception of 15% PA for small service provider ( i.e. service provider whose taxable services does not exceed 60 Lacs during any of the Financial year under notice or during the last preceding financial year.Assuming ur taxable services less than 60 lacs Interest will be Rs.92/- only .

Further in my opinion U have to deposit the penalty U/s Sec 76 only after the adjudication order against U .

The current provision of Sec 76 w.e.f. 08.04.2011 is as follows

1) Rs 100/- per day for the delay days or

2) 1% of the tax liability  Per Month

whichever is higher

subject to maximum of 50% tax liability.

Regards

CA RAJESH MANGAL AGRAWAL

[Guest]

Dear Experts,

 

The interest rate @18% on delay of Service tax payment applicale wef 01/05/11 bcz finance bill was approved by notification on dated 30.04.11

AI Summary

Interest on delayed service tax payment now charged at elevated rates with reduced rate for small service providers. Interest on delayed service tax comprises an increased general interest rate introduced in 2011 with a concessional lower rate for small service providers; penalty for non-payment is levied as either a fixed daily amount or a percentage of tax per month, charged from the first day after the due date until payment and subject to an overall cap, and some commentators indicate penalties may require adjudication before demand.