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Investment Simplified > Tax > Service Tax Interest Rate
Tax

Service Tax Interest Rate

Ashish Kumar
Ashish Kumar November 1, 2022 4 Min Read
Updated 2022/11/15 at 2:00 PM
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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 It has been replaced by GST and got subsumed with other indirect taxes.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.

Contents
Interest on Late Payment of Service TaxService Tax Interest CalculatorService Tax Penalty RulesPenalty for Non-Payment of Service TaxPenalty for Late Filing of Service TaxService Tax Interest Rate: FAQs

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

  • 18%p.a.
  • 15% p.a. (For assesses having turnover upto ₹60 lakhs)

1st October, 2014 to 13th May, 2016

  • 18% p.a.- Delay for first 6 months
  • 24% p.a. – Delay from 7th month to 12 month
  • 30% p.a. –  Delay for the period beyond 1 year

14th May, 2016 onwards

  • 24% per annum: Service Tax collected but not paid before due date
  • 15% per annum: Service tax not collected and not paid

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 DaysPenalty
Upto 15 days₹500
Between 16 days-30 days₹1000
More than 31 days₹100 per day of default

Service Tax Interest Rate: FAQs

1. What type of tax is service tax?

Service is an indirect tax and is controlled by Central Board of Excise & Customs (CBIC).

2. What is the interest rate for late payment of service tax?

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.

3. Can interest of service tax be waived off?

In terms of Section 75 of the Act, payment of interest is mandatory on every person who fails to deposit the Service Tax.

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Posted by Ashish Kumar
Ashish Kumar is a SEO content writing enthusiast and an avid blogger who closely follows the latest financial trends. He writes about various topics related to Insurance, Aadhaar, PAN, Banking and other financial products.
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