we are paying service tax quarterly i.e 5th of every quarter ( 5th july,5th oct,5th jan) as we are proprietary and partnership organisation

Skip to content# How to calculate interest on service tax? what is the interest rate? ?

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we are paying service tax quarterly i.e 5th of every quarter ( 5th july,5th oct,5th jan) as we are proprietary and partnership organisation

The rate of interest is 13% p.a. Now you calculate proportionate interest on each delayed payment. Suppose for Nov,07 you had to pay Rs. 100 and you paid it on 19th may 08 so delay is 196 days. Interest will be (Rs. 100 *13%*196/365) = Rs. 6.98. Similarly for Dec,07 if you had to pay Rs. 200 interest is due for 166 days @ 13% on Rs. 200 = 11.82. calculate for all months and add up total interest payable

Basic formula each payment due= amount due*13%*no.of days delayed/365

14% P.A. (on Daily basis)