For query regarding service tax : interest on delayed paymen

This query is : Resolved

arpit (Querist)
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28 June 2013 Dear Sir,

I am very thank full to you and your team for compiling such a great book for Service Tax ( i.e. Service Tax Ready Reckoner, 21st Edition). I have start reading it and i like your way of presentation, it is really appreciable.

Sir i need your help regarding a matter of Service Tax. Currently we got an demand notice from service tax department in which department has ask to pay Interest on Cenvat Credit which is late availed and utilized .
The fact of the case are as follows :-

1. We filed the return for the period 2010-11 in which service tax liability and Cenvat Credit is less shows and claimed than actual.

2. On the verification done by Service tax department, they ask for the additional duty liability.

3. On further verification we found that there are some cenvat cerdit is remain unclaimed of that period.

4. we reckoned that cenvat credit with additional duty liability and paid the balance liability with interest .

5. Now ST Department is asking interest on that delayed payment of service tax i.e. Service Tax paid through Cenvat Cerdit

On referring your book i do not find any provision or Rule related to the interest on delayed utilization of Cenvat Credit.

Please help me regarding this matter as soon as possible.

Thanks & Regards
Arpit Bohra

Pradeep Nainawati

Pradeep Nainawati (Expert)
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03 July 2013 If the tax is paid after due date, assessee is liable to pay interest on the same at applicable rate. Utilisation of CENVAT Credit to discharge service tax is one way to discharge your liability. Department has rightly asked for interest.