Service Tax- Interest on late payment of tax

Late Payment of Service Tax

Simple Interest is levied on Late Payment of Service Tax and the Interest Rates with effect from 1st April 2011 vide Notification No. 14/2011 – Service Tax dated 1st March 2011 is as follows:-

Gross Turnover	Interest on Late Payment
More than Rs. 60 Lakhs	18%
Less than Rs. 60 Lakhs	15%

BUDGET 2014: INCREASE IN INTEREST ON LATE PAYMENT OF SERVICE TAX

Arun Jaitley while presenting Budget 2014 on 10th July has increased the rate of interest on late payment of service tax. The interest rate on late payment of service tax to be levied on a simple interest basis would now vary depending on the extent of delay in payment of service tax. These new interest rates for late payment of service tax introduced in Budget 2014 would come into effect from 1st October 2014 and are as follows:-

Extent of Delay	Simple Interest p.a. on Late Payment of Service Tax
Upto 6 months	18%
From 6 months upto 1 year	24%
More than 1 year	30%