It might happen that you forget to pay your service tax on-time. For this, you have to pay interest on delayed payment of service tax. Interest is payable by assessee under section 75 of Finance Act, 1994. The authority charges certain service tax interest rate on the delayed payment of service tax. However, after the implementation of GST in 2017, service tax no longer exists. It has been replaced by GST and got subsumed with other indirect taxes. Also, audit and assessment of service tax cases continues even after the implementation of GST in case of any demand.
Interest on Late Payment of Service Tax
Below given is the summary of service tax interest rate u/s 75 of Finance Act, 1994 starting from the year 1994:
Period | Rate of Interest |
1st July, 1994 to 15th July, 2001 | 1.50% per month |
16th July, 2001 to 15th August, 2002 | 24% p.a. |
16th August, 2002 to 9th September, 2004 | 15% p.a. |
10th September, 2004 to 31st March, 2011 | 13% p.a. |
1st April, 2011 to 30th September, 2014 |
|
1st October, 2014 to 13th May, 2016 |
|
14th May, 2016 onwards |
|
Service Tax Interest Calculator
The government charges interest on service tax, if individual fails to pay the tax on-time. With service tax interest calculator, one can easily calculate the interest on service tax to be paid. However, there has been certain service tax interest changes made since 1994 by the government that were in power. To check your interest payment on service tax, you can opt for service tax late payment interest calculator which can be googled anytime to know the charges. Simply type on the Google search – Service Tax Interest Calculator and click on the results as per your choice to proceed further.
Service Tax Penalty Rules
There are certain service tax penalty rules decided by the government of India under which if one fails to make service tax payments or filing service tax returns on-time. Below given are service tax penalty rules for the same-
Penalty for Non-Payment of Service Tax
- Individual will be liable to pay 10% of service tax in case of non-payment
- No penalty will be implied if service tax along with interest is paid within 30 days of service of notice
- Penalty can be waived off only if valid documents are submitted describing the proper reason for delay or non-payment of service tax
Penalty for Late Filing of Service Tax
The government has decided to fine penalty for late filing of service tax with a capped maximum of ₹20,000 along with number of days delayed.
| Delayed Days | Penalty |
| Upto 15 days | ₹500 |
| Between 16 days-30 days | ₹1000 |
| More than 31 days | ₹100 per day of default |
Service Tax Interest Rate: FAQs
Service is an indirect tax and is controlled by Central Board of Excise & Customs (CBIC).
The assessee need to pay 18%p.a. in case of 1st six months of delay and 24% p.a. in case delay more than six months.
In terms of Section 75 of the Act, payment of interest is mandatory on every person who fails to deposit the Service Tax.
