Rate of interest on late payment of service tax

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Mohd Nadeem (Querist)
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13 June 2016 Dear Seniors, Can anyone help me with regard to changes in the rate of interest for delayed payment of service tax. Also let me know if there is a change, will it be retrospective? Kind regards Mohd Nadeem

Rupesh Jain

Rupesh Jain (Expert)
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13 June 2016 at present rate as below
Service Tax collected but not deposited to the exchequer (Government) 24%
Other Cases 15%
If in case the value of taxable services of preceding year does not exceeds Rs. 60 Lakhs, then the rate of interest on late payment will be 12%.
The above changes will come into effect from 14th May 2016 i.e. the day the Finance Bill, 2016 receives the assent of the President.

and before that
The following interest on delayed payment of service tax will be applicable from 1-10-2014-

Period of delay Rate of simple interest
Upto 6 month 18% p.a.
More than six month and up to 1 year 18% p.a. for the 1 st six month of delay and 24% p.a. for the delay beyond 6 months.
More than a year 18% p.a. for the 1 st six month of delay + 24% p.a. for the period beyond 6 month upto 1 year + 30% p.a. for any delay beyond one year

Mohd Nadeem

Mohd Nadeem (Querist)
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13 June 2016 Thanks for the reply.. But i have one more question suppose i have pending payment of service tax for the month of march 2016 and i have to make a payment today or after may 14, 2016 when finance bill get assent. Now wil i have to make late payment of service tax with interest @ 24% from march?

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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19 July 2025 You will pay interest at the old slab rates (tiered structure) from due date (say April 6, 2016) up to 13 May 2016, and
Then apply new rate from 14 May 2016 onward.
This is not retrospective. The new rates apply only from 14 May 2016 onward.

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