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Interest on service tax

P-A-W-A-N (TAX - MANAGER AT GURGAON) (541 Points)

20 December 2012

PLEASE GIVE INFORMATION ON LATE DEPOSITE OF SERVICE TAX

FROM WHICH DATE INTT. IS CALCULATED

HOW MUCH THE RATE OF INTEREST.

PLZ GIVE EARLY AS POSSIBLE.

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12 Replies

CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

Interest is payable for the period from the first day after the due date till the actual date of payment of any defaulted service tax amount.

Interest is to be calculated for DELAYED NUMBER OF DAYS only..

Suppose if service tax is payable on 05.07.2012 but actually paid on 14.12.2012.. the no of days in delay is 162.. therefore int will be S.tax liab * 18% or 15 % * 162/365

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CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

for 'small scale sector' assessee it is 15 %.. any other assessee it is 18%

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guru krish (nil) (86 Points)
Replied 20 December 2012

hi harish,
thanks for your details. can you give details regarding penalty for late filing of service tax paid ?

kavitha (studying final) (830 Points)
Replied 20 December 2012

hi guru krish

20000 is the penlaty

CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

Penalty for late payment of service tax ? or late filing of service tax returns??

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CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

because interest on late payment of s.tax is different and penalty for late payment is different.. both are covered by sec 75 and sec76 respectively.. sec 75 i have explained above.

Sec 76 is

(a) Rs 100 per day for every day during which such failure continues. OR

(b) at the rate of 1% of such tax, per month. whichever is HIGHER.

CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

Penalty for Delay in furnishing return is governed by SEC 70:

It says

upto 15days - Rs 500

16 to 30days- Rs 1,000

After 30days - Rs 1,000 + Rs100 per day in excess of 30days.

However the penalty cannot exceed Rs 20,000.

kavitha (studying final) (830 Points)
Replied 20 December 2012

i think harish iyer according to latest news the penalty raised to 20000/- from april 2011

kavitha (studying final) (830 Points)
Replied 20 December 2012

no circular but department is collecting that much!!! recently one of my cleint paid 40000 for 2 half years. why i dont know!!!

CA Hareesh ( ) (1637 Points)
Replied 20 December 2012

Ms. Kavitha..

Even I'm mentioning the very amended section w.e.f 8.4.2011 regrding penalty. As per that, the maximum penalty only cannot exceed 20,000. i dont think it is a flat straight amount of 20k. You have slabs.

Though i vaguely have any idea about how practically it is been collected by the department, it was a clarification given after actually referrin to a Service Tax book by Girish Ahuja and Ravi Gupta.

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guru krish (nil) (86 Points)
Replied 21 December 2012

hi hareesh and kavitha,

Thank you both..i asked for penalty which is applicable for 'late filling'of service tax ? the maximum amount 20000is penalty for late filing or interest for non payment of service tax ?