Calculation of interest on late payment of service tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 February 2016
hello,
my query is that we are not paying the amount service tax of rs.18000 from 12/10/2012.now we are willing to pay the servicetax amount including the interest component.but i am confused regarding the rates of interest calculation.so kindly give the working of the calculation as on today.
Thanking you
my query is that we are not paying the amount service tax of rs.18000 from 12/10/2012.now we are willing to pay the servicetax amount including the interest component.but i am confused regarding the rates of interest calculation.so kindly give the working of the calculation as on today.
Thanking you
Suresh Ramaswamy
(Expert)
02 February 2016
The rate of interest on delayed payment of service tax was @ 18% per annum till 30th September 2014. Thereafter the interest rates were revised effective from 1st October 2014 as follows:
First 180 days @ 18% per annum
Next 180 days @ 24% per annum
Thereafter @ 30% per annum.
In cases like yours where more than 360 days have elapsed before 1st October 2014, the rate will be 18% and 30%.
Service Tax interest is calculated on daily basis. Since the tax was collected on 12th October 2012, the due date for deposit is 6th November 2012.
Therefore, assuming you pay the tax on 5th February 2016, your interest calculation will be as under:
((!8,000 x 18%)/365) x 693 days
((18,000 x 30%)/365) x 493 days
For any further delay just increase the number of days payable @ 30% p.a.
The Interest payable is simple interest and there is no interest on the interest unpaid.
0
First 180 days @ 18% per annum
Next 180 days @ 24% per annum
Thereafter @ 30% per annum.
In cases like yours where more than 360 days have elapsed before 1st October 2014, the rate will be 18% and 30%.
Service Tax interest is calculated on daily basis. Since the tax was collected on 12th October 2012, the due date for deposit is 6th November 2012.
Therefore, assuming you pay the tax on 5th February 2016, your interest calculation will be as under:
((!8,000 x 18%)/365) x 693 days
((18,000 x 30%)/365) x 493 days
For any further delay just increase the number of days payable @ 30% p.a.
The Interest payable is simple interest and there is no interest on the interest unpaid.
0
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