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Rate of Interest – Late Payment Service Tax

Rate of Interest – Late Payment Service Tax

Date from Date to Interest Rate (%) Description
16-Jul-01 15-Aug-02 24
16-Aug-02 09-Sep-04 15
10-Sep-04 31-Mar-11 13
01-Apr-11 30-Sep-14 18.00*
01-Oct-14 18.00* For delay up to first 6 months
01-Oct-14 24.00* For delay from next 6 months to 1 year
01-Oct-14 30.00* For delay beyond 1 year

 

 

*Note: Relief of 3% rate of interest is available to small service providers having turnover below Rs. 60 lacs during any of the FY or last preceding FY

 

Interest on delayed payment of service tax [Section 75]:

Failure to pay service tax, including a part thereof within the period prescribed, attracts simple interest at a rate not below 10% p.a. but not exceeding 36% p.a. as may be notified by the Central Government. Interest would also apply in case of excess availment and utilization of CENVAT credit.

(1) Rate of interest: Notification No. 12/2014 ST dated 11.07.2014 prescribes slab rates of interest which vary with the extent of delay. The rates of interest for delayed payment of service tax are as follows:

Extent of delay Simple interest rate per annum
Up to 6 months 18%
More than 6 months & upto 1 year 18% for first 6 months, and 24% for the period of delay beyond 6 months
More than 1 year 18% for first 6 months, 24% for second 6 months, and 30% for the period of delay beyond 1 year

(2) Period for which interest is payable: Interest is payable for the period by which such crediting of the tax or any part thereof is delayed.

(3) Concession of 3% for specified assesses: In case of a service provider, whose value of taxable service provided in a financial year does not exceed Rs 60 lakh during any of the financial years covered by the notice or during the preceding financial year, as the case may be, such rate of interest shall be reduced by 3% per annum.

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