Interest on delayed payment

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Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2011 What is the current rate of interest on delayed payment of service tax and is there also any penalty for the same?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 August 2011 Interest rate is 18% per annum to be calculated only for the number of days delay.

Querist : Anonymous

Querist : Anonymous (Querist)

19 August 2011 But i have heard that there is also a penalty of Rs. 200 per day. Is that true?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 August 2011 Further, failure to pay service tax also attracts a penalty under Section 76 of the Act, which shall not be less than Rs 200 for every day during which such failure continues or at the rate of 2% of such tax per month, which ever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, such penalty would not exceed the service tax payable.

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CS Bijoy

CS Bijoy (Expert)
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19 August 2011 Agreed with Expert..

CA Navin Jain

CA Navin Jain (Expert)
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19 August 2011 Interest rate With effect from 01.04. 2011
18% per annum : Notification No. 14/2011- ST, dated 01/03/2011

If turnover of any assessee is up to Rs.60 lakh, such assessee is liable to pay interest at 15% per annum

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 August 2011 Navin Ji

15 % affair is only related to cases covered under section 73A ( excess collection etc.,).
Proviso to section 73B is reproduced below:-
“Provided that in the case of a service provider, whose value of taxable services provided in a financial year does not exceed sixty lakh rupees during any of the financial years covered by the notice issued under sub-section (3) of section 73A or during the last preceding financial year, as the case may be, such rate of interest shall be reduced by three percent per annum.”

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