LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Non payment of interest on service tax

Soumya (Senior Accounts Executive) (235 Points)

23 June 2016

Dear All,

What will happen if i do not pay interest on service tax.

Please suggest.

Reply
Follow
Share

7 Replies

CA Sujeet Kumar (Self-Practice) (738 Points)
Replied 23 June 2016

Notice will be issued subject to condition

CA Saurabh Singh (Practising Chartered ) (974 Points)
Replied 24 June 2016

Hi Soumya

Penalty under Section 76 of Finance Act, 1994 can be imposed for delay in payment of S.Tax. However, Section 80 of Finance Act, 1994 provides that no penalty shall be imposed Section 76, if the assessee proves that there was reasonable cause for the delay in payment.

1 Like

Arun Kumar Singh (GST Advocate) (15188 Points)
Replied 24 June 2016

It will come to the notice of department then you need to pay.

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 24 June 2016

INTEREST RATE IS 18%, PAYABLE DAYWISE,

BUT FOR KIND INFORMATION PAYMENT OF INTEREST IS VERY TAUGHT TO INSERT IN THE ST-3 RETURN

BETTER FOR SMALL AMOUNT AVIOD IT.

karan (Company Secretary and Head Accounts in employment) (25 Points)
Replied 24 June 2016

If you dont pay it now,

You will have to pay at the time of audit. Its better to pay at the time of payment of service tax

CA Ankit sachdeva (Self- Practice) (35 Points)
Replied 25 June 2016

SECTION 73

No penalty shall be imposed in respect of any service tax payment made by the assessee with applicable interest before issue of Show Cause Notice u/s 73(1) in cases not covered by extended period of limitation, i.e. cases where service tax is not payable by reason of fraud, collusion, willful misstatement, suppression, etc.

In cases of service tax determined during the course of audit, investigation or verification, even if those cases are covered by extended period of limitation, if the service tax along with interest and penalty equal to 1% of such tax, for each month, for the period during which the default continues, up to a maximum penalty of 25% of the tax amount, is paid before the issue of show cause notice u/s 73(1), then proceedings in respect of such tax paid shall be deemed to be concluded.

· SECTION 80

No penalties u/s 76 and 77 can be imposed if the assessee proves that there was reasonable cause for any such failure or contravention;