What is latest interest rate for default in deposit of service tax payment. Kindly also provide reference.
Faiz Ahmed
( Article Trainee)
(1731 Points)
Replied 14 August 2010
Default in service tax payment is governed by Sec.75 of Finance Act. It is mandatory in nature. Prescribed limit is between 10% p.a.and 36% p.a..
Currently the notified rate of interest is 13% p.a.
For more details refer to latest study material of Taxation.
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 14 August 2010
Interest under service tax has to be calculated on the day basis and not like as interest payable under income tax act.
Presently interest has to be paid @ 13% p.a. and required to be paid before submitting of ST return.
Regards,
Manoj
RUPESH CHOUDHURY
(Student)
(484 Points)
Replied 14 August 2010
Dear Ameet Ji,
"Delay in payment of service tax, including a part thereof, attracts simple interest in terms of section 75 of the Finance Act,1994. The rate of interest is as prescribed from time to time, in accordance with this section. At present, the rate of interest is 13% per annum (notification No. 26/2004-ST, dated 10.9.2004). Further, failure to pay service tax also attracts a penalty under Section 76 of the Act, which shall not be less than Rs 200 for every day during which such failure continues or at the rate of 2% of such tax per month, which ever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, such penalty would not exceed the service tax payable."
Hope you found the answer.
-Rupesh
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 15 August 2010
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