Industry & Economy
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Taxation
Interest rate lowered on delayed payment of service tax
K. R. Srivats
New Delhi
,
Sept. 13
INTEREST rate on delayed payment of service tax has now been pegged at 13 per cent a year , which is a tad lower than the 15 per cent rate that prevailed prior to the recent enactment of the Finance Act 2004.
The Centre had through the Finance Bill 2004, which received Presidential assent last Friday , empowered itself to fix a interest rate on delayed payment of service tax that would be "not below 10 per cent and not exceeding 36 per cent per annum."
With a range now specified in the Finance Act 1994, the Finance Ministry has the flexibility of changing the interest rate (within this specified range) on delayed payment of service tax from time to time through executive orders.
It has now used this flexibility to fix the rate at 13 per cent a year for the time being, official sources said.
The Centre hopes to mobilise Rs 14,150 crore from service tax during the current fiscal.
The Budget estimate of Rs 14,150 crore for 2004-05 is nearly 70.5 per cent more than the revised Budget estimate of Rs 8,300 crore for 2003-04.
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