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2014

vijay (Ariticle) (101 Points)

21 August 2015

interest on late payment of service tax is amended w.e.f 1/10/2014

upto 6M-18%

6M-1 YR-24%

more than 1 YR -30%

my doubt is that when payment of service tax is not done from 01/04/2011 how we have to calculate interest??

upto 30/09/2011 @ 15%

there after as amended rates?

or from 01/04/2011 at amended rates??

and also 3% concession is available for the amended rates(18,24,30)??

piz suggest,,,,

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2 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 21 August 2015

18% or 15% (as the case may be) simple interest upto 30.09.2014.
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Variable interest rates will apply on/after 01.10.2014.
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Illustration:
.
Assume a case where service tax became due, say, on the 06.07.2012 and the assessee pays the dues on 06.12.2014. In such a case, the interest to be charged would be as below:
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(i) 18% simple interest upto 30.09.2014.
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(ii) For the period from 01.10.2014 to 06.12.2014, the rate of interest will be 30% since the period of delay is beyond one year.
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As specified in the proviso to section 75, 3% concession on the applicable rate of interest will continue to be available to the small service providers.
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Source: Letter D.O.F. No. 334/15/2014-TRU, dated 10.07.2014 (Refer Page No. 6)
https://www.cbec.gov.in/ub1415/do-ltr-jstru2.pdf