Variable Interest rate for delayed payment of Service Tax - Amendment

Dear Readers,

This amendment is effective from 01.10.2014

Before Amendment -

18% p.a. simple interest for the period of default for all the assesses w.e.f 01.04.2014 [Section75 read with Notification No. 26/2014 dated 10.09.2004]

After Amendment –

  • Upto 6 months – 18%
  • More than 6 months and upto one year - 18% for first 6 months and 24% for delay beyond 6 months.
  • More than one year - 30% for any delay beyond one year. [Vide Notification No. 12/2014 dt. 11.07.2014]


Impact –

Interest rate will vary depending upon extent of delay. Rates have been increased to encourage prompt payment of Service Tax. As specified in the proviso to section 75, 3% concession on the applicable rate of interest will continue to the small service provider.


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