We currently consult for a Contracting Firm which has a delay in payment of Service Tax. ST from Oct 2008 is pending to be paid. Should we decide to pay now, how do we go about doing it? Can we get installments or do we need to knock off the entire amount at one shot. What is the interest that would be levied and can we claim any input credits??
Yes you can set off input credit through cenvat credit account
for delay in payment interest of 13%pa is applicable
and it even attrcats penality of 200per day of default
you should make the payment of service tax along with interest @ 1.08% per month for the total period immediately after setting off the Input Cenvat credit. If you have not received any show Cause notice from the department, your payment will be treated as voluntary payment and if department ask for any penalty, you can fight very well contending that you had good intentions to pay the service tax & you have paid it with interest without any malafied intentions. There are number of settled cases in this regard.
Rahul Dang & Associates-Chartered Accountants
Pune
CA Inter
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