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Service tax interest calculation

subhadeep (employee) (45 Points)

04 February 2015

how is the calculation of service tax interest of late payment of partnership firm service tax paid on quarterly basis. so what is the system of calculation of service tax interest on late payment of a partnership firm ?

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CA Neelam Maheshwari (internal Auditor) (497 Points)
Replied 04 February 2015

18%, 24% or 30% depends upon period of delay. In case of p'ship firm ST is to be paid on quarterly basis. If you did not pa ST by due date, interest will be charged from the due date till the date when we actually pay ST.

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Deepak Gupta (CA Student) (15922 Points)
Replied 04 February 2015

18% or 15% (as the case may be) simple interest upto 30.09.2014.
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Variable interest rates will apply on/after 01.10.2014.
- Notification No. 12/2014-ST, dated 11.07.2014 (link)
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Sl. No.	Period of delay	Rate of simple interest
1.	Up to 6 months	18%
2.	More than 6 months and up to 1 year	18% for the *first 6 months* of delay, and 24% for the delay *beyond 6 months*
3.	More than 1 year	18% for the *first 6 months* of delay 24% for the period *beyond 6 months up to 1 year, and 30%* for any delay *beyond 1 year*

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As specified in the proviso to section 75, 3% concession on the applicable rate of interest will continue to be available to the small service providers, i.e. assessee having turnover not exceeding Rs. 60 lakhs during the preceding financial year or during any of the financial years covered by the notice.
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Time limits have been prescribed on monthly basis whereas interest is required to be computed on per day basis.
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If service tax became due after 01.10.2014, you may download this calculator (link).
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Where service tax became due before 01.10.2014 and was paid after 01.10.2014, then see this example for clarity (link).