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Herebelow is the chart showing simple interest leviable on the amount of tax in case of delayed payment of tax under Punjab VAT Act, 2005 under section 32 and section 27(7).It should be noted that such simple interest is not a penal interest and is payable without any requirement of show cause notice and has to be paid along with the delayed payment of tax.

Nature of Delay
Section
Rate of simple Interest
Failure to pay tax by due date of payment
32(1)
0.5% of tax due per month from the due date till the actual date of payment
Failure to deposit TDS by due date of payment
27(7)
1.5% of amount deductible per month from the due date till the actual date of payment
Rectification of any error or omission in return after its furnishing, which results in higher amount of tax due than the original Return
32(2)
1.5% of the additional tax payable per month from the due date till the actual date of payment
Failure to declare amount of tax in the Return
32(3)
1.5% of the tax not declared per month from the due date till the actual date of payment.
Failure to pay amount of tax or penalty on demand issued by department
32(4)
1.5% of amount of tax or penalty due per month from the date of expiry of notice period or 30 days
Payment of recovery amount after vacation of stay order on recovery of any tax or penalty
32(4)
1.5% of amount ultimately found to be due per month from the date the tax and penalty first became due
(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)

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