Dear All
As the interest rate for late deposit of service tax liability has been increased from 13% to 18% w.e.f. 1st April 2011, whether it will be applicable for the period falling after 1st April 2011 or amount deposit after 1st April 2011. For Example: Liability of the Assesee is Rs 2L for September 2010, and it will be deposit the same this month i.e. August 2011, how will it compute its liability for interest like
From October 10 to March 11 - 13%
April 11 to August 11 - 18% OR
From October 10 to August 11 - 18%
Please reply asap.
Regards
RAPG & Co.
Interest Rates on Late Service Tax: 13% Before April 1, 2011; 18% After; 15% for Turnover Under Rs 60 Lakhs A query was raised regarding the applicable interest rate on late deposits of service tax liability, given the increase from 13% to 18% effective April 1, 2011. The question was whether the new rate applies to periods after April 1, 2011, or to amounts deposited after this date. An example involved a liability from September 2010 paid in August 2011. The response clarified that interest should be calculated at 13% up to March 31, 2011, and at 18% from April 1, 2011, unless turnover was under Rs 60 lakhs, in which case the rate is 15%. (AI Summary)
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