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Urgent query

ayesha (mcom) (1185 Points)

30 May 2015

if our company has nor paid service tax for financial year 2013-14 till today, then should we calculate interest @ 18 % or 30% from due date till now.

the rate change in interest rate notification was w e f 1 oct 2014 ,it was not retrospective ,so we have charges interest from 2013 till today @ 18 % flat.

plz advise

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14 Replies

(Guest)

i dont agree.. i think interest should be charged in following manner -

upto 30 sept 2014 - @ 18 % p.a.

from oct 14 to march 15 - 18% p.a.

from april 15 to 30 september - 24 % p.a. (but in ur case it will be calculated for 2 months)

however m not sure..wait for any expert's comment

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 30 May 2015

Even i dont agree with ayesha. https://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=21169

Kashish Gupta (B.com (H) , ACA) (368 Points)
Replied 30 May 2015

Suppose service tax was payable on 06.04.2014

It is not paid till today

Then interest is calculated as follows :

Upto 30.09.2014 : Service tax x 18%p.a.

01.10.2014 to 06.10.2014 : Service tax x 18 p.a.

[On 06.10.2014 - 6 months are completed]

07.10.2014 to 06.04.2015 : Service Tax x 24%p.a.

Kunal Lodaya (Student CA Final ) (35 Points)
Replied 30 May 2015

I also dint agree wuth aayesha. The details guven by the experts above are correct.

CA Fenil H. Doshi (-) (50 Points)
Replied 30 May 2015

As per the transitional provisions Upto 30.09.14 -18%pa From 1.10.14 - 30% pa However, If turnover for the periods covered is less than 60lacs in each of the year, rate of 30% will be reduced to 27%pa

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Deepak Gupta (CA Student) (15922 Points)
Replied 30 May 2015

18% or 15% (as the case may be) simple interest upto 30.09.2014.
.
Variable interest rates will apply on/after 01.10.2014 (in the given case, the rate of interest will be 30% since the period of delay is beyond one year).
.
Illustration:
.
Assume a case where service tax became due, say, on the 06.07.2012 and the assessee pays the dues on 06.12.2014.
.
In such a case, the interest to be charged would be as below:
.
(i) 18% simple interest upto 30.09.2014.
.
(ii) For the period from 01.10.2014 to 06.12.2014, the rate of interest will be 30% since the period of delay is beyond one year.
.
- Clarified in D.O. Letter from JS(TRU), dated 10.07.2014 (refer page no.6): Click Here

Manish (student) (469 Points)
Replied 31 May 2015

18% pa till 30 sept 30% pa after that

sharad sharma (auditing assistant) (21 Points)
Replied 31 May 2015

18% p.a till 30 sep. 2014 after that amendmened rate of interest will be applied ie. 18%to 30% according to defaulted period. If T/O of preceding year is less than 60lacs than rate of interest shall be reduced by 3%..

Sourabh Jain (Credit Manager) (62 Points)
Replied 31 May 2015

first six month of default 18% @ & 7-12 month 24%pa.& remaining period 30% pa. This rate is reduced by 3% if p.y. amount of taxable services is below 60 lacs

Sourabh Jain (Credit Manager) (62 Points)
Replied 31 May 2015

But this is effective from 1.10.2014 not before

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Jolly (student) (41 Points)
Replied 31 May 2015

I think.... 18%flat up to 30th sep. 2014 than up to 6 months 18% and next period 24% p.a interest will be paid

jayakumar (cafinal student) (112 Points)
Replied 31 May 2015

there are 2 sections-

one is section 75 about advance payment received from customers but not paid here interest rate is 18% for 6month and 24% for 6month to one year, and above one year 30%. the interest rate will be calculated from the suceeding begining of the month i.e mean from the 1st day of the succeding month.

and another section 78 takes about delay in payment which is payment is not paid by the assessee with in due date i.e mean 6th day of succeding month. the interest rate will be 18% all the days.

and all assesse haveing the turnover below 60lacks in the previous year can get 3% concession rate for all placess.

Ashish Arora (Article Assistant) (81 Points)
Replied 31 May 2015

18% p.a. till 30th september 2014 and thereaftet according to the slab in which u r falling For example, Service tax was payable on 6-2-2014, then upto 30-9-14 18% p.a. and thereafter 24% p.a. for next 4 months and 30% p.a. thereafter.