As the interest rate for late deposit of service tax liability has been increased from 13% to 18% w.e.f. 1st April 2011, whether it will be applicable for the period falling after 1st April 2011 or amount deposit after 1st April 2011. For Example: Liability of the Assesee is Rs 2L for September 2010, and it will be deposit the same this month i.e. August 2011, how will it compute its liability for interest like
From October 10 to March 11 - 13%
April 11 to August 11 - 18% OR
From October 10 to August 11 - 18%
Please reply asap.
RAPG & Co.
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The interest on late deposit of service tax has been increased from 13% to 18% (15% for those assessee whose turnover in the previous year is less than Rs 60 lakhs) from 01-04-2011.
Consequently, interest on late payment upto 31-03-2011 will be 13% and from 01-04-2011, it has to be calculated at 18% (or 15% as the case may be)
I agree with reply given by shri Thakkar.