Clarification Regarding Penalty On MVAT ?

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Sanjivkumar Shah

Account Manager

107 Points Posted on 31 May 2008

Hi Friends,

1. As Per rule under M.V.A.T. Act, If Anyone files late return i.e. for the month of Apr'2008 it has to be filed till 21st May'2008 but filed on 10th June'2008. In this case he will have pay interest of 1.25% Per Month ? I am having doubt regarding interest rate ?.

2. So, when the penalty comes into force i.e. when penalty is levied & at what rate / amount ?

Regards

Sanjiv.

Replies (2)

biren thakkar

accounts manager

274 Points Posted on 03 June 2008

Dear sanjiv,

Please find herewith the mVAT act rules for interest clarification

88. Rates of interest –

(1) The rates of interest for the purposes of sub-sections (1), (2) and (3) of section 30 shall be one and a quarter per cent. of the amount of such tax, for each month or for part thereof,

(2) The rate of interest for the purposes of section 52 shall be half per cent. of the amount of such tax for each month or for part thereof.

The rate of interest for the purposes of the sub-section (1) of section 53 shall be half per cent. of the amount of such refund for each month or for part thereof.

The rate of interest for the purposes of clause (b) of sub-section (6) of section 51 shall be one and a quarter per cent of the amount of excess refund which is to be recovered, for each month or part thereof.

(In above rule 88, after sub-rule (3) sub-rule (4) is added by Notification No. STR-1506/CR-38/Taxation-1 Dt.08.09.2006)