Be sincere to your statutory dues or bear the cost of insincerity.-Interest on delayed payment of service tax

Be sincere & serious to your statutory dues or bear the cost of insincerity.

In Union budget 2014-15, it has been proposed to increase the rate of interest to the extent 

of period of delay in payment of service tax.

It means that rate of interest would vary on the extent of delay in payment of service tax. 

More delay more interest burden.

As per Notification no-12/2014-ST, Interest rate per annum payable on delayed payment of service tax under section 75 of Finance Act,1994 would be as under:-

Extent of delay	Simple interest rate per annum
Up to six months	18%

More than six months & upto one year	18% for first six months, and                      24% for the period of delay beyond six months
More than one year	18% for first six months,   24% for second six months, and 30% for the period of delay beyond  one year

This change will take effect from 1^st October 2014 thus upto 30^th sep 2014 the rate of interest of 18%, (presently applicable,) will continue to apply.

Illustration

Aassume service tax became due, say, on the 6th of July, 2012 and the assessee pays the dues on 6th of December, 2014. In such a case, the interest to be charged would be as below:

(i)            18% simple interest upto September, 30th, 2014. (Old rate i.e present rate)

(ii)           For the period from 1st  October, 2014 to 6th  December, 2014, the rate of interest will be 30% since the period of delay is beyond one year.