How to calculate Interest on Service Tax not paid?

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  1. mahesh uv

    mahesh uv New Member

    How to calculate interest on Service Tax if it is not paid from Oct-13?
    And we want to settle the same in Aug-16.
     
  2. ZED

    ZED Well-Known Member

    Since the rates of service tax were changed in the intervening period , the best thing to do would be to apply that rates of interest which were applicable at the time of default.

    The default is of continuous nature, but interest rates are different therefore you should bifurcate the period of two default and charge interest accordingly.

    For default upto the date of changing of interest rate, calculate the interest as per the old provision, when the provision was revised, from its effective date compute the default till the date of actual payment.
     
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