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interest for delay service tax payment

jaya pandey (accountant) (97 Points)

17 July 2009

If we paid the service tax after 6 days of due date, how much we have to pay the interest for the delay.

e.g. total Payable amount is Rs.25108 (service tax)

how much the int. for the delay of 287 days . plz explain with accounting code

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10 Replies

VARUN (PCC STUDENT) (523 Points)
Replied 17 July 2009

In case of delayed payments ( after due date) the assessee is required to pay simple interest at the rate prescribed. Notification No. 26/2004 dated 10.09.2004 has specified the rate of interest at 13% per annum. So, In ur case interest amount will be ...

25108*13%*6/365=53.65

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INTEREST ON LATE PAYMENT OF SERVICE TAX (SEC.75)

If the Service Tax has been paid after the due date, simple interest @ 13% shall be charged for the period of delay. If delay in payment of service tax is for 10 days, interest will be paid for 10 days only. Period of delay is counted from the first day after the due date till the actual payment of service tax is made. Eg: if service tax of Rs. 10000 is payable on Sept 5, 2008 but is paid on Sept 15, 2008, the delay is for 10 days and thus, simple interest of Rs. 36 (i.e. Rs. 10000*13%*10/365) is also required to be paid.

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jaya pandey (accountant) (97 Points)
Replied 17 July 2009

thxxxxxxxxxxxxxxxx a lot

amit (student) (291 Points)
Replied 17 July 2009

Deepak is absolutely right.......

Nandhini R (Chartered Accountant) (28 Points)
Replied 22 May 2010

Hi all. whether interest on delayed payment of service tax is deductible expense while computing income tax. I would require the section no. where it speaks about the allowability / dis allowance of the same

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 24 May 2010

HI Nandhini,

U can claim the deduction of interest paid on Service Tax u/s 37 of the income tax act 1961. Further, the said interest on delayed payment of service tax is deductable on the due basis provided u have paid the same to government before the due date of furnishing of return. this has been given u/s 43B of Income Tax Act.

Hope this solves u'r query............