Monday, March 9, 2009


on Monday, March 9, 2009

I have a doubt regarding service tax payment.ABC Ltd issued a following bills,

Invoice no.1;

The Invoice date is:19-01-2009
Payment Received :12-02-2009

So Is any late fee is chargeable for the invoice No.? if I pay on today.

Invoice No.2;
The Invoice date:05-02-2009
Payment Received : 04-03-2009

For this invoice the late fee is chargeable after 5th April,Am I right?

Shihabuddin TP,

Dear Shihabuddin TP, as per service tax act/rules ,due date to deposit service tax act for company assessee is(read full details about due date from here)
  • by the 6th day of the month,immediately following the calendar month in which the payments are received, towards the value of taxable services,if the duty is deposited electronically through Internet banking; and(How to pay online service/excise tax)
  • by the 5th day of the month,immediately following the calendar month in which the payments are received, towards the value of taxable services,in any other case,
  • except payments received in the month of march are to be deposited in same month by 31st march.
so from the above its very much clear that

due date for service tax payment is based upon

  • service tax payment received and
not on the
  1. service rendered date or
  2. Date of billing
  3. Due date of payment as per service contract but payment not received.

so now take your first invoice

Ignore date of billing i.e 19.01.09 but date of receipt of payment is 12.02.2009 so due date for amounts received in month of FEB is 05.03.2009 or 06.03.2009(for electronic payment) & today is only 9th only 2-3 delay .

Interest On delay payment: as explained above the due date for payment of service tax for the above bill (for Feb) has already gone so we have to pay interest penalty which is 13 % per annum at simple Interest.So we will calculate interest for 4-5 days on amount payable @13 % per annum.In service tax act/rules there is no provision to charge full month interest for delay in part of month.So interest is chargeable for actual delay period for payment.

Now You second Invoice ,as per detail given above ,amount has been collected on 04.03.2009 so it's due date to pay service tax is 31.03.2009 and not 5th April as given above due date for service tax collected in month of march is payable by 31st march in same month.

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  1. My opinion on the above service tax calculation is as follows:
    If the asseessee is raised bills in 2009, at the material time, the tax payable is on receipt basis only till 30.06.2011. For both the payments receipt, if the assessee is individual / firm / proprietory concern, the due date for payment is 31.03.2009 and interest applicable @ 13% upto 31.03.2011 and 18% from 01.04.2011 onwards till the date of payment. Hope the details will suffice the assessee's requirements.