Ajinkya (Accountant) (126 Points)
13 January 2016Sir/Madam,
On 11.05.2015 my company got Rs. 180000/- towards compensation of Loss of interest arising due to early termination of Leave & License Agreement from Licensee then in that Case what Should be the Service Tax Amount? What is the Interest on Service Tax from 11.05.2015 & What is the penaly for late payment of service Tax?
Mir Irshad Ali
(Partner)
(192 Points)
Replied 13 January 2016
The amount of compensation received by you appears to be chargeable to Service Tax under category of declared services.
Service Tax @ 12.36% is liable to be paid on the taxable amount.
Interest @ 18% for period of 6 months from due date and @ 24% for subsequent 6 months is payable.
Since the neither the Service Tax is paid nor the said amount of compensation is declared in the ST-3 Return for period Apr-Sep,2015, it appears that Penalty of 15% of S.Tax is payable, if paid before notice is issued or within 30 days from date of receipt of notice.
SECTION 66E. Declared services. — The following shall constitute declared services, namely :—
(a) renting of immovable property
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(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act;
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