Prov for interest on Service tax

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ashwini (Querist)

09 August 2010 Dear sir

Can u pls tell me whether provision for interest on service tax or any other tax is allowable expenses or not as per sec 43B? If yes pls provide the case low, if any or explan.

Thanks

Best regards
Ashwini

CA Sanat Pyne

CA Sanat Pyne (Expert)

09 August 2010 INTEREST ON SALES TAX, SERVICE TAX IS ALLOWABLE EXPENSES.
REFERRED CASE LAW
LACHMANDAS MOHURADAS VS CIT (2002)
TRIVENI ENGG WORKS LTD VS CIT (1987)
RUSSEL PROPERTIES (P) LTD VS CIT (1981)

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

09 August 2010 PROVISION FOR INTERST ON DELAY PAYMENT OF SERVICE TAX/ANY OTHER GOVT DUE IS ALLOWABLE EXPENSES IF IT IS DEPOSITED BEFORE DUE DATE.BECASUE IT IS NOT PENAL NATURE, IT IS COMPENSATORY NATURE.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)

09 August 2010 https://www.caclubindia.com/forum/details.asp?mod_id=47959&offset=2

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

09 August 2010 Section 43B attracts for provision for interest on service tax if not paid with in the stipulated time. However interest paid on service tax payment is an allowable expenditure as per section 37(1) of the income tax Act,1961.
The following case law may be relied even though delivered in the context of Sales tax interest.
Lachmandas Mathurdas Vs. CIT (2002) 254 ITR 799(SC).

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