Primary & secondary education cess on interest & penalty

This query is : Resolved

N.Harish Ballal (Querist)
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08 January 2014 Dear Sir,

I would like to know whether Cess of 2% & 1% is applicable on Interest for delayed payment of Service Tax & Penalty for delayed payment of Service Tax.

Further when i make the online payment in the website there are codes for cess specifically mentioned for Interest & Penalty.

Please share your expertise at the earliest.

AJITHKUMAR M

AJITHKUMAR M (Expert)
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08 January 2014 Dear friend,

1. No cess is payable for interest and penalty.

2. If the amount of interest and penalty is pertaining to E Cess or S HE Cess, then such interest and penalty is to be deposited in the corresponding accounting codes.

N.Harish Ballal

N.Harish Ballal (Querist)
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08 January 2014 Thanks for your proactive reply.

I am confused with point 2. Please elaborate.

For better understanding let me take an example.

Period from 1-1-13 to 31-3-13.
Service Tax Liability(12%) is 1794.
Cess @ 2% is 36 (1794*2%)
Cess @ 1% is 18 (1794*1%)
Total is 1848 (1794+36+18)

Interest @ 15% for delayed payment upto January is 231 (1848*15%)

Penalty is 1040 (restricted to 50% of tax payable ie, 1848+231*50%)

Please clarify whether cess @ 2% & 1% is to be computed on interest & penalty.

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AJITHKUMAR M

AJITHKUMAR M (Expert)
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20 January 2014 Dear friend,
No cess is to be computed on interest and penalty

AJITHKUMAR M

AJITHKUMAR M (Expert)
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20 January 2014 Dear friend,
No cess is to be computed on interest and penalty

N.Harish Ballal

N.Harish Ballal (Querist)
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20 January 2014 Dear Sir,

Thank you very much.

Regards,