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)
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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

Aashok Kumar Sharma (Expert)
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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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