Service Tax Interest Rates w.e.f 14.05.2016 (India)

By | June 11, 2016
(Last Updated On: January 22, 2017)

Service Tax Interest Rates w.e.f 14.05.2016

Analysis of Service Tax Interest Rates w.e.f 14.05.2016

  • Service Tax Interest Rates  w.e.f 14.05.2016 in case of Collection of any amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before the date on which such payment becomes due : Simple Interest Rate @ 24% [NOTIFICATION NO.13/2016-ST, DATED 1-3-2016 ]

  • Service Tax Interest Rates in case of Collection of any amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before the date on which such payment becomes due  in case of assessees whose value of taxable services in the preceding year/years covered by the notice is less than Rs.60 Lakh  : Simple Interest Rate @ 21% [ Proviso to Section 75  and NOTIFICATION NO.13/2016-ST, DATED 1-3-2016 ]
  • Service Tax Interest Rates  w.e.f 14.05.2016 Other than in above situations  : Simple Interest Rate @ 15% [NOTIFICATION NO.13/2016-ST, DATED 1-3-2016 ]
  • Service Tax Interest Rates on delayed payment of Service Tax  in case of assessees whose value of taxable services in the preceding year/years covered by the notice is less than Rs.60 Lakh, : Simple Interest Rate @ 12% [ Proviso to Section 75  and NOTIFICATION NO.13/2016-ST, DATED 1-3-2016 ]

Example on Service Tax Interest Rates in Different cases w.e.f 14.05.2016

  • Case where Service Tax collected but not deposited to the credit of central government  and value of taxable service in preceding year is less than Rs.60 lakh :Service Tax Interest Rates  @ 21%
  • Case where Service Tax collected but not deposited to the credit of central government and value of taxable service in preceding year is more than Rs.60 lakh : Service Tax Interest Rates  @ 24%
  • Other casewhere value of taxable service in preceding year is less than Rs.60 Lakh 12%
  • Other case where value of taxable service in preceding year is more than Rs.60 Lakh 15%

Relevant Notification on Service Tax Interest Rates

NOTIFICATION NO.13/2016-ST, DATED 1-3-2016

In exercise of the powers conferred by section 75 of the Finance Act, 1994 (32 of 1994) and in supersession of the notification No. 12/2014-Service Tax, dated the 11th July, 2014, published in the Gazette of India, Extraordinary, vide number G.S.R. 482 (E), dated the 11th July, 2014, except as respects things done or omitted to be done before such supersession, the Central Government hereby, for delayed payment of any amount as service tax in the situation mentioned in column (2) of the Table below, fixes the rate of simple interest per annum mentioned in the corresponding entry in the column (3) of the said Table:—

Serial Number Situation Rate of simple interest
(1) (2) (3)
1. Collection of any amount as service tax but failing to pay the amount so collected to the credit of the Central Government on or before the date on which such payment becomes due. 24 per cent.
2. Other than in situations covered under serial number 1 above. 15 per cent.
  1. This notification shall come into force on the day the Finance Bill, 2016 receives the assent of the President.

Note : Finance Bill 2016 received the Asset of the President on 14.05.2016  Read Finance Act 2016 Notified by Indian Govt

Relevant Section 75  of Finance Act 1994 on Service Tax Interest Rates

Interest on delayed payment of service tax.

75. Every person, liable to pay the tax in accordance with the provisions of section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at such rate not below ten per cent and not exceeding thirty-six per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette for the period by which such crediting of the tax or any part thereof is delayed :

Provided that in the case of a person who collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government, on or before the date on which such payment is due, the Central Government may, by notification in the Official Gazette, specify such other rate of interest, as it may deem necessary:

Provided further that in the case of a service provider, whose value of taxable services provided in a financial year does not exceed sixty lakh rupees during any of the financial years covered by the notice or during the last preceding financial year, as the case may be, such rate of interest, shall be reduced by three per cent per annum.

Buy Service Tax Manual (English)

Service Tax Interest Rates w.e.f 14.05.2016

BUY

 

Related Post on Service Tax and Interest :

Direct Taxes Ready Reckoner Service Tax Ready Reckoner Company Law Ready Reckoner tax deduction at source
New Books Released on Tax , GST and law

One thought on “Service Tax Interest Rates w.e.f 14.05.2016 (India)

  1. Pingback: New Interest rates for delay in payment of service tax | Tax Heal

Leave a Reply