consequences of non payment of interest on late payment of service tax

sir,
please suggest what may the consequences for non payment of interest amount at the time of filling of service tax return. only tax amount is paid.

Replies (2)

Section 75 of the Finance Act, 1994 provides for levy of interest on delayed payment of Service Tax.

If Interest is not paid,  the department, in addition to recovery of the interest amount, can impose penalty [which may extend to Rs. 10,000/0] under Section 77 of the Finance Act, 1994.

better to deposit the interest with correct calculation without revising your return (depending upon you), if dept raises question, it cannot be argued that you did not pay tax of x amount or short paid.

while calculating tax and interest, make adjustment towards proportion of tax on which interest would sum up in a way to equate total tax paid till date. And balance amount of tax plus interest till date later on. i.e you paid only a portion of tax earleir and balance now with interest.

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