service tax late payment

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Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2011 my client is one of the construction company. it has received payments from the memebers in F.Y.10-11, Company has not deposited the amount of service tax. Now if it wants to pay service tax with interest then which rate will be appliacble??13% or 17%??plz reply me urgently....

sai swaroop munaga

sai swaroop munaga (Expert)

06 April 2011 Till 31.03.2011 it is 13%
From 01.04.2011 it is 18%

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Querist : Anonymous

Querist : Anonymous (Querist)

06 April 2011 that means the payment which has been recd in the 2nd quarter, 3rd Quarter or 4th Quater of 2010-11, i have to calculate interest upto 31st March at 13% and after that 18%....m i right??

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

24 July 2025 You’ve got the right idea, but let me clarify the interest rates and how they apply for late payment of service tax:

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### Service Tax Rates in FY 2010-11:

* **Service tax rate was 10.3%** (including cess, etc.) for most of 2010-11.
* The **interest rate on delayed payment** of service tax is what you are asking about here (13%, 17%, 18%).

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### Interest Rate on Late Payment:

* **Till 31st March 2011**, the **interest rate on delayed service tax payment was 13% per annum** (approximate, depending on exact notifications).
* **From 1st April 2011 onwards**, the interest rate on delayed payment was increased to **18% per annum** (some sources mention 17%, but official was 18% from April 2011).

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### Your understanding is correct:

* For payments **due during FY 2010-11** but paid late **before 31 March 2011**, interest is calculated @ 13% per annum.
* For interest **accruing after 31 March 2011**, it will be calculated @ 18% per annum.

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### How to calculate interest:

* Calculate interest for the delayed period within FY 2010-11 @ 13%.
* Calculate interest for the delayed period from 1 April 2011 onwards @ 18%.
* Add both interest amounts for total interest payable.

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### Summary Example:

* Suppose service tax was due on 1st Dec 2010, but paid on 1st July 2011.
* Interest from 1 Dec 2010 to 31 March 2011 (120 days) @ 13% p.a.
* Interest from 1 April 2011 to 1 July 2011 (91 days) @ 18% p.a.
* Total interest = sum of above two interest amounts.

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If you want, I can help with a detailed calculation if you provide exact amounts and dates. Would you like me to?

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