Interest on service tax

This query is : Resolved

varsha (Querist)
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21 March 2009 Can interest charged on service tax paid be claimed as a deduction from the profit of the business in the year in which it is paid? If not , what is the usual accounting treatment?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 March 2009 Interest paid,u/s 75 of Finance Act,1994, on service tax is not penal but compensatory in nature and ,therefore ,any sum paid on this account can be claimed as business expenditure.

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