Interest on late payment of service tax

This query is : Resolved

ATANU BANERJEE (Querist)
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15 April 2016
Dear All,
Please let me know what amount of penalty or interest will charge if I have not paid the SBC in time.I have wrongly paid the Service Tax amount including SBC in accounting code 00440060 (Service tax).Not separate between service tax and swachh bharat cess for the month of December'15. When I am submit the return of Service tax should it create any problem. What should be the solution.

Thanks,
Atanu

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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15 April 2016 There are two aspects involved in your case. The first is that you have paid SBC under the Service Tax Code. Secondly how this should be reflected in the ST - 3 Return.

Handling the aspect of ST - 3 Return. I presume you have paid the tax @14.5%. In that case, when you fill the row B.1.15 of the ST - 3 Return you split the tax rate as ST 14% and SBC 0.5%. Then when the respective taxable turnover is filed in the relevant month / quarter column, the Tax Payable under both heads would be reflected and the total would equal the tax payable @ 14.5%.

Part H - I Details of challan asks only for the month / period, CIN (Challan No) & Total Amount paid. Hence your Return will be accepted by the system.

Regarding the first problem, to split the Tax paid into Service Tax 14% and SBC 0.5% I quote from a Trade Notice of 2014 issued by Mumbai Service Tax-I Commissionerate:

"The first mistake is where the Service Tax has been paid in the wrong accounting code which may occur due to wrong data entry of accounting codes. To illustrate, Service Tax payable for "Business Auxiliary Service" (accounting code No. 00440225) might have been paid under service, "Business Support Services (accounting code No. 00440366) or basic Service Tax might have been paid under accounting code for Education Cess [accounting code No. 00440298). For such mistakes, it is mentioned that as long as these mistakes have happened under the same Service Tax Code [also known as Registration Number or Assessee Code), the assessee should inform Deputy Commissioner (Technical], in writing along with copy of Service Tax payment Challan and by giving information in a prescribed format."

Hence you can approach your Divisional AC / DC alongwith a letter and copy of the challan asking for directions to rectify the mistake. It should be sorted out easily.

The question of additional tax payment, interest and / or penalty would not arise, if the tax has been paid @ 14.5%.

I hope this clarifies your doubts. There will be no problem when you file the ST - 3 Return.