Service tax evaders have been given a window to clear their dues in the Budget 2014-15, at a lower rate of penal interest.
According to a provision introduced in the Budget, in case of delay in payment of service tax, the penal interest will go to as high as 30 per cent if the delay is for more than a year.
The finance ministry has adopted a calibrated approach in levying the penal interest on delay in payment of service tax. However, the provision is applicable only from October 1, 2014. “This has been done to provide a two-month window to defaulters who might want to avail of the lower interest rate for delay in payment. Currently, the interest rate for delay is 18 per cent. Those who haven’t deposited the service tax collected can seize the opportunity,” a source told The Indian Express.
The source said that the department was enthused by the response received from the taxpayers on the service tax voluntary compliance encouragement scheme announced last year. The exchequer raked in over Rs 7,000 crore from the scheme from over 30,000 applications received.
According to the scheme, a service tax defaulter wanting to avail of the scheme could pay the tax dues in one or two instalments without paying any penalty and interest by filing a truthful declaration. It provided for self-declaration and payment of service tax dues from October 1,2007 to December 31,2012. The defaulters had to declare their dues by December 31 and pay 50 per cent of the total amount.
The rest is payable without interest by June 30, 2014 and with interest by December 31, 2014. The department had received the applications seeking amnesty from sectors including construction, real estate, works contract, manpower supply, renting of immovable property and business auxiliary services.
- Here’s Why Delhi-NCR Gets Pollution Code On Lines Of Beijing
- PM Modi Is More Interested In TRP Politics Rahul Gandhi At Congress Parliamentary Meet
- Bigg Boss 10 December 1 Review: Priyanka Jagga Succeeds In Her Divide And Rule Strategy
- Kahaani 2 Audience Reaction: Vidya Balan Starrer Thriller Gets Mixed Reviews
- Find Out What PM Modi Said About Demonetisation On LinkedIn
- Row Over West Bengal ”Military Coup” Issue Escalates: Who Said What
- Here’s How Mohammad Kaif Replied To Virender Sehwag’s Birthday Wish On Twitter
- West Bengal CM Mamata Banerjee’s Flight Reportedly Had Low Fuel: Here’s What Happened
- Reliance Jio Welcome Offer Extended Till March 31, JioMoney Launched
- Uri Attackers Came From Pakistan, Establishes Digital Data
- Bigg Boss 10 Nov 30 Episode Review: Captaincy Brings Differences In Manoj Punjabi & Manveer Gurjar
- Congress Vice President Rahul Gandhi’s Official Twitter Handle Hacked
- After Rahul Gandhi’s Twitter Handle, Congress Official Twitter Account Hacked
- 3 Dead As Army Helicopter Crashes In Sukna In West Bengal
- BJP, Congress Engage In War Of Words Over Nagrota Attack: Find Out More
“This is an attempt to encourage assessees to come up and pay the department,” the source said.
According to the Budget proposal, for a delay of up to six months, a simple interest of 18 per cent per annum would be charged. A delay from six months up to one year would attract 24 per cent and delay beyond a year would cost the assessee 30 per cent, the highest so far.
In 2011, the department had done a comprehensive review of the penal system in the service tax and had increased the interest rate to 18 per cent from April 1.
Prior to the amendment, an interest rate of 13 per cent was charged for the delay in depositing the service tax. According to the service tax act, every assessee has to pay the due service tax quarterly on the sixth day of the month following the quarter in case of electronic payments. In other cases, it is the fifth day of the month following the quarter. The section 75 of the Finance Act, 1994, provides for simple interest in case of delayed payments. Till May 2001, it was 1.5 per cent, which was later increased to 24 per cent till May 11, 2002. It was brought down to 15 per cent and then further to 13 per cent till March 2011.