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Interest and Penalties on late tax payment

From 01.04.2011, the interest rate is 18% per annum is payable for late payment of Service Tax. For the assesses having less than 60 lakh Taxable Service, interest rate is @ 15%. And penalty for late tax payment is Rs.100/- for each day or 1% of tax whichever is higher (Total amount of penalty shall not exceed 50% of tax payable). After going through the Negative List of Services, Mega Notifications For Exemption Of Services, Declared Services Partially / Fully Reverse Charge Mechanism, Place Of Provision Of Services and such new amendment of service Tax Law from 01/07/2012 and the latest amendments upto the end of year 2014 and updates. we properly guide in the matter. As per ammended Finance Act 2013, the maximum penalty imposable for failure to obtain registration will be Rs.10,000/- only.

A new section is also being introduced to impose penalty on directors and officials of the company for specified offences in cases of willful actions.who is in any manner knowingly concerned with specified contraventions; And further, punishment of imprisonment for minimum 6 months to 7 years have been proposed in Finance Act 2013 for specified offences. So, our timely and proper advice to our client, save them from interest, penalties and prosecutions. FURTHER from 01.10.2014 variable rate of interest will be applicable on delay in tax payments.

S.No. Period of Delay Interest Rate
1 Upto 6 months 18%
2 More than 6 months and upto 1 year 18% for 1st 6 months of delay and 24% for the delay beyond 6 months
3 More than 1 year 18% for 1st 6 months of delay, 24% for the delay beyond 6 months upto 1 year and 30% for any delay beyond 1 year



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