25 April 2019
In terms of order by addl commissioner gst service tax is determined as payable. our contention that services fall under pure agent is not accepted by service tax department
The order also asks to pay interest for delayed payment
My question is interest liability will start from which date ? from due date of payment as per ST3 or date on which service tax payment has been determined
09 July 2024
In the context of service tax liabilities and interest payments, the liability for interest typically accrues from the due date of payment as per the ST-3 return. Here’s a breakdown of the relevant points:
1. **Due Date as per ST-3 Return:** - The ST-3 return is a self-assessment return filed by the taxpayer for service tax liabilities. Interest on delayed payment of service tax generally starts accruing from the due date of payment as per the ST-3 return.
2. **Date of Determination by the Service Tax Department:** - The date on which the service tax liability is determined by the Service Tax Department is crucial for understanding the total liability including interest and penalties. This determination might come after an assessment or audit by the department.
3. **Interest Calculation:** - Interest is calculated on the amount of service tax determined to be payable from the due date of payment (as per the ST-3 return) until the date of actual payment or deposit.
4. **Impact of Service Tax Order:** - In your case, since the Additional Commissioner has determined the service tax as payable and you are disputing it, the interest liability would generally start accruing from the due date mentioned in your ST-3 return. This is because the ST-3 return represents your self-assessment of the tax liability.
5. **Payment of Interest:** - When making the payment for the determined service tax liability (as per the order), you would need to calculate and pay interest on the delayed amount. The interest rate and calculation method are specified under the Service Tax rules and are typically compound interest.
6. **Legal Remedies:** - If you disagree with the Additional Commissioner's order, you may have legal avenues such as appeal or revision under the GST laws to challenge the order. During the pendency of such proceedings, it's important to comply with any payment obligations including interest, to avoid further penalties.
In summary, interest on delayed payment of service tax typically starts accruing from the due date of payment as per the ST-3 return. The determination of service tax liability by the Service Tax Department through an order would clarify the exact amount owed, including interest, from that due date onward. It’s advisable to consult with a tax professional or legal advisor for specific guidance tailored to your situation.
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