Service tax interest calculation & penalty for late payment

The amount of compensation received by you appears to be chargeable to  Service Tax under category of declared services.

Service Tax @ 12.36% is liable to be paid on the taxable amount.

Interest @ 18% for period of 6 months from due date and @ 24% for subsequent 6 months is payable.

Since the neither the Service Tax is paid nor the said amount of compensation is declared in the ST-3 Return for period Apr-Sep,2015, it appears that Penalty of 15% of S.Tax is payable, if paid before notice is issued or within 30 days from date of receipt of notice.

SECTION 66E. Declared services. — The following shall constitute declared services, namely :—

(a) renting of immovable property

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(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;