Intt on late payment of service tax

This query is : Resolved

Aayushi (Querist)
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20 September 2009 hi
can u please let me know is the interest paid on late deposit of the service tax is an allowable expense under income tax act 1961.

Please reply soon

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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20 September 2009 No it is not an allowable expenditure.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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20 September 2009 Sir,

Can you please specify, under which provision of the IT Act, such an amount is disallowed.

This being a normal expenses of a commercial nature, it should be allowed u/s 37.

CA. abhinav kumar

CA. abhinav kumar (Expert)
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21 September 2009 As per provision of section 40(a)ii, iia only interest on income tax and wealth tax is disllowed.
as interest on servicetax , sales tax and other interest is normal business expenses hence allowed.