Please Help: Interest on VAT payment

Posted Date : 27-Sep-2013 , 04:37:59 pm | Posted By Priyanka

Whether interest on late payment of VAT is admissable expenditure or not?

Category : Income Tax | Answers : 1 | Comments : 4 | Hits : 6112

Answers

Answer By: SUBHASH KUMAR JHA

Under section 37 only penalty for violation of law is not allowed as deduction.
u r paying interest not penalty so it will be allowed.

Comments

You need to be logged in to post comment

DINESH SURYAWANSHI

02-Oct-2013 , 10:02:27 am

Interest paid on delay in payment of vat is compensatory in nature, and even i totally agree with Mr.Subhash Kumar Jha

Deep Kanwar Singh

02-Oct-2013 , 11:35:04 am

yes the expenditure on interest on late payment is admissible. As per section 37 of income tax act penalty for late payment or violation is disallowed

Payment of interest on govt. dues is also a sort of indirect penalty to penalise the person to stop the practice of misusing the govt funds for personal use. If it would not be there then the people will become habitual for misusing the govt. dues for their personal benefits as they will get the interest payment as expenditure according to you. If the persons here agreeing with the view of interest on VAT as allowable expenditure than what do they think about payment of interest on Income Tax?? If interest payment on Income Tax is not an allowable expenditure then how on VAT it can be an expenditure?? So payment of interest on any govt. dues is not an allowable expenditure.