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Big blow to service providers - Incremental interest rates for delayed payment of service tax

By TIOL News Service

NEW DELHI, JULY 10, 2014: NOTIFICATION No 12/2014 ST dated 11.07.2014, is going to be a draconian Notification for service providers. The interest for delayed payment of service tax at 18% which is already much above the market rate has been further revised depending on the delay. The revised rates are as under. These rates are applicable from 1 st October 2014.

Sl.No.

Period of delay

Rate of simple interest

(1)

(2)

(3)

1.

Up to six months

18 per cent.

2.

More than six months and up to one year

18 per cent for the first six months of delay and 24 per cent for the delay beyond six months.

3.

More than one year

18 per cent for the first six months of delay; 24 per cent for the period beyond six months up to one year and 30 per cent for any delay beyond one year.

30% interest rate is perhaps the highest rate in any country by any standards. The service industry is already suffering as the service tax has to be paid even before they receive the payment from the clients. The new provisions will cripple them further.


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: unconscionable thirty percent interest

The proposed interest rates belie the business-friendly promise of the Modi Sarkar and are plain confiscatory. There is bound to be a vigorous opposition to the move. Even the Courts may not look on kindly at this insensible move.

Dr. Ravindran Pranatharthy
Advocate

Posted by Ravindran Pranatharthy
 

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