Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Thursday, June 9, 2016

Rate of Interest on Service Tax on Slab Basis, Simple Interest on days basis

There has been different rates of interest on service tax dues on different periods. Here under given Interest rates applicable from 01.04.2011 on wards

Effective Date
Period of delay
Rate of simple interest
01.04.2011
In Case Service Provider has turnover exceeding 60Lacs
18% on the days of delay calculated on daily basis
In all other cases
15% on the days of delay calculated on daily basis


01.10.2014
Upto 6 months
18% on the days of delay calculated on daily basis
More than 6 months upto 1 year
18% for first 6 months and on balance period of delay upto 1 year @24%
Delay for more than 1 year
18% for first 6 months and on balance period of delay upto 1 year @24% and on balance delayed period after 1 year @30%
14.05.2016
Collection of Service Tax but not deposited to Govt Account before the due date
24% on days of delay after the due date
Other than above situation
15% on days of delay after the due date
Notes :
1. As per Section 75 of Finance Act 1994 in case the Service Tax provider has turnover not exceeding  60 lacs in any financial year under notice or preceding Fin Year is given rebate of 3%  and effective rate of interest will be 12%
2. As per Service Tax Act interest payments are mandatory in nature and such interest demands on delay can not be waived.
3. The Provisions of Section 75 Finance Act 94 the interest provisions for delay in payment of service tax is applicable in case of reverse charge mechanism also for the service receiver to pay interest on delay in payment of dues of service tax.

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