Due Date for Payment of Service Tax & Int. on Late Payment

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As per the Service Tax Rules framed by the Govt. of India, Payment of Service Tax should be made at regular intervals. The Service Tax collected by the Service Provider shall be paid to the credit of the Central Govt. on a regular basis before the Due date for Payment of Service Tax and in case of Late Payment of Service Tax – Interest shall also be payable on the Late Payment as prescribed.

In case you are still not sure regarding the Rates of Service Tax, you can check the Current Rates in force by referring here – Service Tax Rates or in case you still havent registered yourself for Service Tax, refer our article on Procedure for Service Tax Registration Online

Due Date for Payment of Service Tax

As per Rule 6 of the Service Tax Rules 1994, the due date for payment of service tax is separate for Individual/ Partnership Firms and others.

For Individual/Partnership Firms

The Due Date for Payment of Service Tax in case of Individual/Partnership Firm is 5th of the Following Quarter in which the Payment is received. However, in case the Service Tax Provider opts for online payments, he is given a grace period of 1 day and thus the Due Date for Payment of Service Tax if the Payment is made online is 6th of the following Quarter.

growing ecommerce in india Due Date for Payment of Service Tax & Int. on Late Payment

For Others

For all Service Tax Payers (except Individual and Partnership Firms), the Due Date for payment of Service Tax is 5th of the Following Month in which the Service Tax is collected. However, if the payment is made online – the due date for payment of service tax becomes 6th of the following month

Exception: – Service Tax Collected for the month/quarter ending March shall be payable by 31st March of the said calendar year

The Payment Schedule has been summarised below for your ready reference

Particulars

Frequency

Due Date

Paid Physically

Paid Online

Individual/Partnership Quarterly 5th of the Following Quarter 6th of the Following Quarter
Others Monthly 5th of the Following Month 6th of the Following Month

From the above it is clear that it is beneficial to pay the amount due online as a grace period of 1 day is allotted and moreover the Tax Payer does not have to stand in long queues for depositing the Service Tax. Payment of Service Tax Online is a simple 3 Step Process and you for payment of service tax online – you can refer this article on Payment of Service Tax Online.

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%

Other Relevant Points

  1. If there is excess payment is made by mistake or due to any other reason, the amount paid in excess may be adjusted against the Service Tax Liability for the coming period or may claim Refund of Service Tax in case Self-Adjustment is not possible
  2. If any person liable to pay Service Tax has collected an amount in excess of the amount due from the service recipient, the whole of such amount collected in excess shall be payable to the Central Govt.
  3. If the Payment is deposited by way of a cheque, the date of payment of Service Tax shall be the date of the cheque rather than the date of clearing of cheque (subject to clearing of the cheque)

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